Widebody aircraft will depreciate more than all other types over the next five years, appraisers indicated at the Ascend Finance Forum London 2012.
Ascend senior aviation analyst, George Dimitroff, and IBA Group president and chief operating officer, Philip Seymour, agreed "the bigger the aircraft, the more it loses value", highlighting the Boeing 747-8 Intercontinental, Airbus A340-500/600s and the A380.
Dimitroff says the 747-8I's customer base remains small and unless the programme sees some dramatic sales in Asia, it "won't do well".
Both appraisers highlighted how the poor economics of the A340-500/600 affect its value in the current economic environment, noting that the real value is in its engines. Seymour said that although the type's value has eroded, there is still further to fall.
"Any aircraft above the A330-300 and, to a certain extent, the 777-300ER, has a limited secondary market," Dimitroff says. While the A380 is a "fantastic" product from a passenger's point of view, says Seymour, he questions its depreciation policy and the cost of reconfiguration: "Who will invest $30 million on reconfiguring the aircraft between two leases?"
Dimitroff says that new 767-300ER models also fall in that category. "The new 767s are coming off [and] will see steep depreciation."
When asked to reveal their top five aircraft which will best retain their value over the next five years, the 777-300ER and A330-300 were picked by both appraisers.
Dimitroff also highlighted the 787, although noted the 787-9 would be the most popular in the long run.
Regional aircraft also featured in Dimitroff's list. "The ATR 42/72 is the only [aircraft] family offering commonality in the 50- to 70-seat market and there are no replacements around. The Chinese are not much of a threat," he comments.
Dimitroff also praised the Bombardier Dash 8 100/200/300, which, although out of production, have not been adequetly replaced, he says.
He also selected the Embraer 175 and 190, saying the latter is increasingly becoming accepted by "operating lessors". Embraer senior vice-president, head of sales financing, asset management and lessor sales, John Slattery confirms that 20% of the manufacturer's total sales are now to lessors.
Dimitroff reckons the E-175 has good prospects because of demand from the USA. "Lots of regional jets have leases expiring in 2015-16. The E-175 has the best economics per seat as a replacement, because you can squeeze [it] under regional flying contracts."
Seymour picked the post 2000-aircraft vintage models, depsite some recent placements at low rates. "We now see lessors placing new and newer A320s on short operating leases, but this has not dramatically slashed our view. Those aircraft will recover."
His final aircraft was the 757, especially with Pratt & Whitney powerplants. "Despite what Boeing says, that aircraft has never been replaced," he says.