Narrowbody value gap will narrow: ALC

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

The gap between Airbus A320 and 737-800 lease rates will eventually narrow once the manufacturers and airlines alter their behaviour, says Air Lease Corporation's chairman and chief executive officer.

"The current market value for the Airbus A320 is depressed relative to the Boeing 737-800," says Steven Udvar-Hazy. "I don't think this will continue because we will reach an equilibrium, as the gap is too big on these jets with similar operating costs and capacity," he says.

Udvar-Hazy estimates the lease rate differential on a 10-year old A320 and a similar 737-800 is 30-35%, and for new aircraft the gap between lease rates is 20%.

"When the manufacturers exercise some discipline on production rates, and more airlines, such as low-cost carriers, opt for used aircraft then this will start to soak up the pricing differential."