Current A/C lease rates - Anyone?

[goflyit]

Read on a thread about Astraeus(UK):
"The A320 is under consideration, primarily because of competitive lease rates available"

To all PPruner's that still have a word now & again with beancounters, do you happen to know the current lease rates (ie: post 9/11, irak, airlines going belly-up) for say a B737-300, a B737-700 and/or A319/320 operating in Europe - either ACMI or drylease?

The basic drylease rule of 0.8 to 1.2% of actual airframe value doesn't seem to make much sense any more, in the current market (ie: many offers & low demands).

Thanks for any info.

PS:Unfortunately, no, I didn't win the lottery :o)

[LGW Vulture]

B737-300 Dry per month - US$100,000 :eek: :eek:

[Boss Raptor]

Mid 80's nothing special mid-weight 737-300 B1, B2 power - as Vulture says $100K a month on a 3 year lease...a high gross weight C1 powered aircraft will still go as high as $165K as they are far more saught after and less readily available...

A 15-18 year old 737-300 has been long paid for on the Lessors books and is very close on market value to become a target for part out as the engines etc. become worth more than the aircraft residual value as a whole. In the second half of its' economic life the value of parts, rotables and engines etc. make up around 3/4's of the total value so remaining life on these items affects overall value in a very marked manner i.e if everything is with limited life remaining the value becomes very low indeed and the airframe almost becomes worthless unless it has good life remaining itself, around least half life remaining to D Check, if not it will most likely be parted out...a Lessee does not want an aircraft facing big bills before they get a couple of years good revenue out of it...in the same way a Lessor does not want to put big money into an aircraft just to go on lease on todays' low returns = part out time...

Much younger and newer type aircraft such as the 737NG's are being parked up by the Lessors awaiting the market to pick up, you wont find many of these around either...

At end of the day these can only be a guide as the lease rate has many variables, such as perceived credit risk of the operator, status of engine, engines etc. (i.e remaining life to heavy D check, which if it occurs during the lease the new Lessee has to pay for and so must be taken into account by both parties).

The cheap lease rates tend to be the older aircraft and only for short time periods such as 3 years, I would expect a Lessor for a more bullish type and/or market to insist on minimum of 5 or even 7 years. The Lessor therefore keeps his options open to raise the lease rate in the long term or place the aircraft with another operator.

In my experience the % guides only really work for aircraft in first 7-10 years of life and also dont take into scarcity or surplus in a particular type within the market.

[Thunderball]

Try US$105,000 per month dry right now for a 1990-build -535E4 powered 757, 3 year term. If you can use one, that's incredible bang-per-buck...

[Press Button B]

A problem with start-ups is that too many are attracted by the lease rate rather than the overall cost of operating and go for a totasly unsuitable type. Lease rates are only part of the monthly cost of the unit. $105k for a 757 may seem good realtive to a 737-300, but unless you can make use of the additional seats to cover to higher landing, en route, fuel, maintenance and cabin crew costs, the 737 may actually be better value for money. Assuming 200 hours per month flying, a 100k lease rate works out at $500 per hour for a very heavy aeroplane. $120k per month for a lighter 737 flying the same network comes out at just $100 per hour more expensive from a lease rate perspective, but then compare the other costs - 100 tonnes vs 65 tonnes for all landing and nav charges, bigger and more thirsty engines to liftl that extra weight, extra one or two CCMs for the extra seats etc etc and the actual cost of operation of the 757 per hour moves up significantly. This is exacerbated by using the heavier aircraft on sectors more suited for a smaller unit, where cycle and landing charges add up rapidly due to the shorter sector lengths.

Obvious question is will you be guaranteed to earn enough extra revenue from a 757 than a 737 to justify the extra costs, in particular can you make use of the additional 50/60 seats at a reasonable yield.

p.s. this post is not directed at www.FreshAer.com but, come to think of it, I assume they have done their math on the 757-200 on 40 minute sectors up against Ryan's 737-800's ....

[Thunderball]

Mention of the 757 wasn't actually intended to imply direct comparison with the 737-300 at all. I was about to cite a B767-300ER at $195k when I came across the 75 at $105k, and it struck me as better value still.

Your point about taking account of all variables in the cost equation are of course well taken, but implicit in my statement "if you can use one" was the assumption that you have a case for using the payload range of the 75, which is probably what you've got to do these days, given the capacity, cost and performance of aircraft like to 737-800.

For the record, we've recently run all the numbers on an operation from Europe through Central Asia to Indo-China using everything from B737-700 to A300-600R and B767-300ER, and the 75 at $105k came out ahead on a unit cost basis at any config above 208 seats.

[Bullet Tooth Tony]

Press Button B

In your example you quoted 200 hours per month as a planning figure. Is that a realistic figure to plan for a short haul aircraft? That means about 6.5 hours per day, every day.

I realise airframe utilisation very much depends on the type of carrier operating it, but it seems quite a lot, especially if the implied question was regarding planning figures for a short hall start up without an extensive route network.

[rentaghost]

I know of a B757-200 that was offered at USD180,000.00 per month 'dry' last Summer, same said unit currently on the market for this Summer at USD100,000.00 per month!:eek:

[Thunderball]

Bullet Tooth Tony

200 hrs a month is low by traditional airline standards, even for short-haul aircraft. I've run 737s on IT at 385/month, month in month out, through the summer (we had a lot of unhappy Slot 3 passengers, though, I readily admit).

But economically, these low lease rates make even 150 hours/month possible if the flying is high quality.

[santan17]

Hi

I am currently doing a university project that involves choosing an aircraft and doing a cost profit analysis for an Air car ferry service between the UK and the continent.
I think I will use the A300-600F, my problem is I cannot find any prices for it, either dry or wet leasing, or to purchase, has anybody got even a rough idea, or know where I could find this info?


Thanks

Norman

PS would a total operating cost of $3600 per block hour sound about right for an A300?

[Thunderball]

santan

Aerial ferrying of cars? You mean like Silver City? With respect, I wouldn't make that my thesis if I was you! A 1000-tonne ground-effect vehicle maybe, but not a conventional jet freighter. (What it would make, however, is a fascinating insight into why a commercial product that may have been viable 45 years ago with the Bristol 172 or the Carvair is not viable today. Perhaps you could begin by establishing how much it would cost to hire a car at your destination in 1957, compared to what it would cost today).

In the -600F you've picked an aircraft that is in scarce supply and (relatively) high demand. I'd suggest $320k/month for Year 1 on a five-year basis, rising to (say) $400k by Year 5. Anyone closer to this market?

[Boss Raptor]

You've hit it spot on Thunderball - value of A300-600F approx $42 mil if you can find one...most built for FEDEX and UPS...very few in outside circulation, 6 if I remember correctly...2 are parked at Bremen ex Citybird...owner/lessors happier to park them than lease out cheap...

Have to agree a project on an airferry type operation should be directed at 'why it wont work' with almost any type rather than the positive!

(Suntan - personally for the purposes of your study I'd choose an IL76TF the re-engined Stage 3 version of the IL76, $38 mil for cash, rear loading ramp, upper pax. deck and around the same operating costs as the A300...in reality I dont believe any such operation would stand up commercially..think your tutor is either having a laugh or if he is serious is a few rivets short of a structural repair!!)

[santan17]

Thats hilarious! Myself and the rest of my group have been thinking exactly the same thing for ages. Apparently though other groups have done it before and my course director insists that there is a market there! So I guess we just have to get on with it and maybe somehow "massage" the figures... :)
I was told by a senior person at the university that you could get between 10 and 12 cars in sideways in an A300.
The IL76 is a great idea, are they readily available? and well supported (spares etc)? What other aircraft would you recommend? I was thinking along the lines of a converted 757 maybe?

Thanks

santan

[AK747]

Boss Raptor,

there are a lot of L1011 Tristars kicking around.
would you have the current lease prices...
Dry and ACMI? long and short term leases.
Thanks
AK

[FLEXJET]

Here are some figures:

It is a comparison of lease rates among lessors between January 2001 and January 2003:


A330-200 : -35 to -38%
B767-300ER: -46 to -57%
A320: : -25 to -41%
B737-800 : -22 to -26%

The level of these rates should remain about the same within the next two to three years, if the recovery after the Gulf War II follows an identical path to the one after Gulf War I.


FLEXJET

(source: Airline Business Magazine)

[TheDream]

Trying to find the purchase price for a 1984 model
d-17 engines
15,000hrs since D check
but have no idea how to check the actual market price.

Thanks