Contact Us
Contact Us
Airbus A330-300

Ascend Consultancy, Expert view, Financial investments

Commercial Aircraft Market Sentiment Index: The fans on the Bus go round and round, again!

March 20, 2023

The resurgence of Lease Rate sentiment this time has been driven mainly by the widebodies.

Ascend analyst Tim Chun Hing Li

The fans on the Bus go round and round, again!

By Tim Li, Aviation analyst at Ascend by Cirium

In April 2021, Ascend by Cirium launched the Commercial Aircraft Market Sentiment Index (CAMSI). The monthly Index tracks market sentiment and trends of values and lease rates through a survey of key market stakeholders, including lessors, banks, OEMs, part-out shops, airlines and brokers.

Within CAMSI, we utilize a NPS Index methodology – calculated as the number of respondents replying ’too high’ or ‘trending up’ minus those replying ‘too low’ or ‘trending down’, divided by the total sample response to that question. Scores in the 40% to -40% range broadly indicate stability, those below -40% can be considered to indicate a negative sentiment and those above 40% indicate a positive sentiment.


With the removal of the quarantine and mask mandates in China, the last piece in the puzzle for getting the world reconnected is now in place. Airlines are doing all they can to increase their capacity but have had to navigate significant constraints in the supply of new aircraft that have hampered them since the start of the recovery. Therefore, to fill this gap, older aircraft are increasingly in the spotlight as operators get their engines turning after being stored for the last few years.

In our February survey, the NPS for Lease Rate trends across all surveyed types remained firmly in positive territory. However, when looking into the trends type by type, new aircraft have maintained their NPS at just over 50 points since Q3 last year. Conversely, the older types’ NPS have surged and closed the gap to just seven points with the new-build average.

Source: Ascend Commercial Aircraft Sentiment Index February 2023

We explored the multiple reasons behind the resurgence of 10-year-old aircraft Market Values in our January Analysis.

However, unlike the January Market Values survey, the resurgence of Lease Rate sentiment this time has been driven mainly by the widebodies, with a 60-point increase on the Airbus A330-300 for example.

About half of the A330-300 HGW fleet of some 670 aircraft are operated by APAC operators, a region where then pace of recovery in passenger traffic has lagged the rest of the world, prior to the reopening of China. The majority of these A330s in China are configured with high-density seating to serve busy short/medium haul routes. Throughout the year 2022, the wider APAC-based operators were gradually restoring their schedules and sending the “big buses” back into the sky. However, with China dropping the quarantine requirement together various other countries removing vaccination and mask mandates in early Q1 2023, there has been a particularly notable increase in the number of aircraft in service and their daily utilisation. The number of tracked A330s with Chinese operators doubled in January 2023 when compared to the month before.

Source: Cirium Tracked Utilisation

The number of available aircraft in the leasing market is also reducing. This is a completely different story from one year ago, when operators were returning them off-lease as part of their phase-out plans, anticipating replacement with new generation widebodies such as the Boeing 787 and Airbus  A350.

With both the number of in-service aircraft and utilisation increasing, as well as continuous placements of the type reducing the number of lessor idle aircraft, sentiment from the market is generally optimistic. In the context of this strong optimism, we conducted a thorough Market Value and Lease rate review in mid-February on the type and increased lease rates of A330-300 HGWs by up to 19%, based on captured data points.

Although the A330-300 (and our other surveyed 10-year-old widebody, the Boeing 777-300ER) are not the latest generation of aircraft, with noisier engines and lower fuel efficiency, it is worth remembering that the average vintage of both aircraft types is just 10-11 years old, with many not even due their first “heavy checks”. Therefore, as we head towards the post-COVID era, this relatively older metal is here to stay with the value and lease rates trends a reflection of this.

We are always looking for further respondents to reflect all aspects of the market, who can then benefit from receiving the full set of results (above is only a top line summary). The CAMSI survey takes only 3 minutes to complete, yet provides respondents with the most comprehensive picture of the aircraft value market trends available. If you would like to participate, please contact michael.graham@cirium.com. Participants will receive a complete and detailed analysis of the survey results, with ten or more graphics included.


SEE MORE ASCEND BY CIRIUM POSTS.

READ ALL OF THE LATEST UPDATES FROM ASCEND BY CIRIUM ANALYSTS AND CONSULTANTS, EXPERTS WHO DELIVER POWERFUL ANALYSIS, COMMENTARIES AND PROJECTIONS TO AIRLINES, AIRCRAFT BUILD AND MAINTENANCE COMPANIES, FINANCIAL INSTITUTIONS, INSURERS AND NON-BANKING FINANCIERS.

MEET THE ASCEND BY CIRIUM TEAM

RELX logo