July’s Aircraft Report: the Airbus A330-200

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

The Airbus A330-200 is only 13 years old but its origins dates back from the mid-1970s.

Airbus' first aircraft, the A300, was envisioned as part of a diverse family of commercial aircraft. Airbus began development of the A300B9, a larger derivative of the A300, which would become the A330. The -B9 was a lengthened A300 with the same wing, coupled with more powerful engines. It was developed in parallel with the -B11 variant, which would become the A340 to compete with the Boeing 767-300ER model. Both programmes were re-designed as TA9 and TA11 with TA standing for "twin aisle" as Airbus also focused its efforts on single-aisle (SA) programmes.

The A330-200 was launched in November 1995. First flight was performed in August 1997 while the first aircraft was delivered to ILFC in April 1998.

The -200 shares near identical systems, airframe, flightdeck and wings of the -300 variant. Its vertical fin is taller than that of the A330-300 to restore its effectiveness due to the shorter moment arm of the shorter fuselage. It has additional fuel capacity and, like the A330-300 variant, has a maximum take-off weight (MTOW) of 233 tonnes. Typical range with 253 passengers in a three-class configuration is 6,750 nautical miles.

In September 2008, Airbus released plans for a higher gross weight version of the A330-200 to more effectively compete against the Boeing 787. The new aircraft, the A330-200 Enhanced version, has a 238 tonnes MTOW giving approximately a 230 nautical miles extra range.

Airbus began delivering an A330-200Freighter derivative, the A330-200F, last year. The freighter programme has clocked 57 orders but main customer Intrepid is converting its 20-aircraft order to the A330-200 or -300 variant.

The A330-200 is powered by two General Electric CF6-80E1, Pratt & Whitney PW4168A and Rolls Royce Trent 772 engines. All engines are ETOPS-180 min rated.

According to ACAS, the Trent 772B-60 engine equips 151 aircraft in operation while another 29 aircraft are powered by Trent 772C-60.

The PW4168A/70A engines power 99 aircraft while the CF6-80E1A variants equip a total of 130 aircraft: 543 are equipped with the -A3 variant while 76 aircraft are with the -A4 variant.

The Trent 772B-60 engine has been selected for 80 future firm orders while the CF6-80E1 engines equips 15 future deliveries and the PW4170A engine is selected for 28 firm orders. The remaining future deliveries remain undisclosed.

Market

The A330 market has enjoyed healthy demand despite the threat of the Boeing 787 entering service. The many 787 delays have kept second hand A330 availability at low levels.

However A330-200 sales have slowed down over the past two years and instead the market has witnessed a sudden resurgence in orders for the larger A330-300 model.

"This may be a short term effect as the longer range of the -200 remains attractive and as the type has been upgraded to a higher gross weight version to make it even more competitive with the delayed Boeing 787. The increased MGTOW not only increases the aircraft's range, it also adds an additional 3.4 tonnes of payload," comments Stefanie Jung, MBA's manager valuations.

At 30 June, Airbus had announced 11 net sales for the A330-200 model this year, while customers had placed net orders for 37 A330-300s. At last month's Paris Air show, Airbus dominated the headlines with the A320 Family Neo. The manufacturer also announced orders from Air Lease Corporation for a total of 11 A330s comprising both the -200s and -300 variants. CIT Aerospace (one aircraft), Air Asia X (an A330-300 and A340-300 operator) and Korean Airlines have the other announced customers so far this year.

In 2010, net orders for the A330 models totalled 45 aircraft, against 47 in 2009. In 2008 Airbus sold 137 A330s, while Airbus racked up 196 firm sales in 2007 against 104 in 2006.

At 30 June 2011 Airbus had sold 566 A330-200 passenger aircraft, eight net aircraft more than at the end of second quarter of 2009. The Airbus executive and private jet programme accounts for 30 aircraft and 17 have been delivered.

The manufacturer has delivered 424 aircraft and excluding the executive and private jets backlog for the A330-200 model accounts for 129 aircraft.

Leasing companies account for 19 future deliveries with AerCap, Aircastle, Aircraft Fleet Purchase and CIT Group among the customers.

According to Flightglobal's ACAS database, there are 111 aircraft of the type with 26 European customers. Average fleet age is 7.34 years. Backlog for European carriers accounts for 14 aircraft.

Middle East and Africa account for 104 A330-200s with 15 customers. Average fleet age is 6.60 years. Middle East and Africa customers account for 10 aircraft in the backlog.

Asian and Pacific-Rim fleets totals for 135 A330-200s with 21 customers. Average fleet age is 4.97 years. An estimated 69 aircraft on backlog are with Asian carriers.

The North American fleet totals 31 aircraft with four customers: Air Transat and Delta (Northwest Airlines fleet) are customers for early models, but over the past two years US Airways and Hawaiian Airlines have introduced the model into their fleets mainly replacing 767-300ERs. Average fleet age is 5.01 years. An estimated 29 aircraft on backlog are with North American carriers.

South American fleets total 28 aircraft with four customers: Air Caraibes, Avianca, Mexicana and TAM Linhas Aereas. Average fleet age is 5.20 years. Avianca is the only South American carrier with outstanding orders.

Backlog for the A330-200 variant stretches to 2016. Airbus delivered 20 aircraft in the first half and according to ACAS, another 20 aircraft are scheduled for delivery between June and December this year.

Collateral Verifications' VP Commercial Aviation Services Gueric Dechavanne says: "The delays on the 787 and the fact that the A350 will not be delivered until 2013+, have also helped the maintain some of the demand of this aircraft due to many operators choosing the A330 to either compliment such orders or to be used as interim lift."

"Even when the 787 and A350 enter into service, the A330 should continue to see a good long term future as a passenger aircraft since we feel that this aircraft will serve as a great compliment to an A350 fleet serving various shorter range markets," comments Dechavanne.

"The A330-200 works well in operators' fleet as a complement to the A330-300. The A350 aircraft is a lot more expensive and therefore the A330 remains attractive for missions which do not require an ultra-long range aircraft. New built A330-200 will benefit from the higher take-off weight of 238 tonnes," says IBA Group's senior analyst Alice Gondry.

Avitas' director asset valuation Martin O'Hanrahan says the A330-200 and 767-300ER types are now facing ultimate replacement by the A350 and 787 which have already won a substantial volume of orders.

ACAS database shows two Afriqayah Airways aircraft currently parked, while two aircraft available from ILFC are understood to be committed.

The latest transaction is Royal Jordanian leasing a 2009-vintage aircraft from Amentum Capital through January 2017. The aircraft was repossessed from Arik Air in March this year over debt payments.

Lease Rates and CMVs

The A330-200 still has fair tailwind ahead, according to one leasing source. "The A350-800 is being delayed by two years to mid-2016 while the A330 has benefited from the 787 delays over the past three years," he comments.

According to him, an A330-200 leases at $800,000 a month against $1.15 million for an Airbus A350-800, which features 30 more seats.

Aircastle said that current market lease rates were $750,000 to $850,000 a month in December 2010, up from $600,000 to $700,000 a month at the trough of the market. The lessor added that at the peak of the market (late 2007) lease rates were in the $900,000 to $1 million range.

Collateral Verifications says a new delivery can lease for $875,000 a month while IBA Group estimates the lease rental in the $780,000 to $820,000 range.

Ascend estimates the lease rates of a new aircraft in the $765,000 a month range. MBA says a new delivery lease rates are $601,500 a month while Avitas says the range is between $640,000 and $765,000 a month.

Another leasing source says some lessees were holding up for some bargains but the market for the -200 keeps improving. According to him, the 'bottom' of the market is now close to the $500,000 a month range, as opposed to mid-$450,000 a few months ago.

MBA is the lowest of the five appraisers for a 1998-vintage aircraft with $429,600 monthly estimated lease rates.

IBA Group estimates the lease rental in the $410,000 to $450,000 range while Avitas says the range is between $420,000 and $490,000 a month.

Ascend estimates the lease rates in the $460,000 a month range while Collateral Verifications says a 1998-vintage aircraft can lease for $475,000 a month.

CAO understands that 2001/02-vintage models are trading in the $540,000 to $570,000 range.

MBA says lease rates for a 2002-build delivery are $467,600 a month while Avitas says the range is between $485,000 and $560,000 a month.

IBA Group estimates the lease rentals in the $500,000 to $540,000 range. Collateral Verifications says a nine-year old aircraft can lease for $575,000 a month while Ascend estimates lease rates in the $510,000 a month range.

Sales of second aircraft have been limited to few transactions with leases attached. In June Air Lease Corp. completed the acquisition of a 2009-vintage aircraft from Aircastle. The aircraft is on lease to Avianca through 2017.

Wells Fargo research estimates Aircastle paid $83-$85 million for the A330-200 back in May 2009 and the sale could result in a book gain of perhaps $5 million. However, after two years of depreciation, Wells Fargo estimates the book value of the aircraft "would be around $77-$79 million".

Gondry says new build aircraft are prone to sale and leaseback transactions, although few aircraft were traded second-hand between lessors this year.

Avitas' director asset valuation Martin O'Hanrahan says aircraft with the less common engine types could take more time to remarket because of the more limited operator base, although Avitas does not see any significant differences in values and lease rates.

Current market values for a 1998-vintage aircraft powered by Trent 772B-60 engines are $43.80 million for Ascend, $44.98 million for IBA Group, $39.14 million for MBA, $38.2 million for Avitas and $36.4 million for Collateral Verifications.

For a 2002-vintage aircraft, current market values are $53.43 million for IBA Group, $52.74 million for Collateral Verifications, $49.38 million for MBA, $48.30 million for Ascend and $46.8 million for Avitas.

Collateral Verifications says a six-year old aircraft has a current market value of $63.86 million while IBA Group has $62.06 million and MBA has $59.31 million. At the lower end, a 2005-vintage aircraft has a current market value of $54.1 million for Avitas and $55 million for Ascend.

Current market values for a 2008-vintage aircraft are $73.13 million for IBA Group, $72.47 million for MBA, $75.27 million for Collateral Verifications. Avitas has a current market value of $62.6 million and Ascend has $65 million.

Ascend consultancy senior analyst George Dimitroff says the PW4168 and CF6-80E1A2 are the least favoured engines with the lowest values. The Trent 772B-60 has close to 50% market share now (including almost 100% dominion of the China market which was only recently broken by Pratt with 10 aircraft) and has a premium of $1.3 million over the basic PW4168A.

"The latest and most powerful Trent 772C-60EP has a premium of $2.1 million over the basic PW4168A. From among the GE engines, the CF6-80E1A3 is the best with a premium of $1.3 million over the PW4168A."

For Gondry, the PW4168A and CF6-80E1A4B powered aircraft have a value discount of $500,000 with the Trent 772B-60 powered aircraft attracting a value premium of $1 million.

Dechavanne "Over the course of the last 12 months, Collateral Verifications has seen values remain somewhat stable for the type with a drop in value of about 5% or so, which can be attributed to normal depreciation. Lease rentals on the other hand have increased by 20% during the same timeframe."

Dechavanne sees signs of continued stability and improvements in lease rentals which will lead to improvements in aircraft values over the next 12-18 months. "Although Rolls Royce seems to continue being the engine of choice by many operators, we have not seen any big value differences between the variants. We see this trend continuing over the next 12 months as the industry continues on its path to recovery."