Lease rates continue decline, says UBS

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Lease rates on the most popular Airbus and Boeing aircraft continue a decline from the peak in 2007 and as recently as six months ago, according to an analysis by UBS.

In a note issued today, aerospace analyst David Strauss said rates declined 1% since April for the Airbus A330 and the Boeing 777, the most popular widebodied aircraft for the two manufacturers. Rates for the prolific Airbus A320s and Boeing 737NG were down 2% in the same period.

Since 2007, rates for the four aircraft are down an average of 14%, UBS wrote. Narrowbody rates are down 17% and widebody rates are down 11%.

"NB rates are retesting their recent trough, now just 4% above October 2009 levels, while WB rates are just 7% above prior trough," UBS wrote. "Lease rates reflect increased competition. We think the recent decline in lease rates reflects increased competition among the lessors following the surge of orders that has increased aircraft availability."