Boeing sees lease rates, second-hand values weakening: UBS

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Lease rates and second-hand aircraft values are weakening due to increasing production rates, according to a new research note issued 7 March by UBS Securities.

The note was issued following a visit to Boeing Commercial Airplanes in Seattle by the UBS aerospace analyst team.

"Boeing acknowledged that lease rates and second-hand values are weakening as new aircraft production moves up," UBS wrote.

UBS also predicts the pressure will increase as early as next year due to what it characterizes as "over-ordered backlogs," weakening traffic and "more difficult" export credit financing next year following the new Aircraft Sector Understanding agreement.