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By Youcef Berour Minarro, Principal Valuations Analyst, ISTAT Certified Appraiser, Cirium Ascend Consultancy
After a successful few days of announcements which saw over 300 new aircraft commitments, the Dubai Air Show came to an end last week dominated by Boeing, with 80% of total commitments announced. A summary of those announcements below shows ten customers across six aircraft families.
2023 marks the best year for widebody orders since 2015
As the chart below illustrates, demand for new twin-aisle aircraft has been on an upward trend since 2020, with 2023 now exceeding pre-COVID levels, of which the greatest demand has been for the Boeing 787. Emirates reshuffled its previous 787-9 order into -8 and -10 variants, as well as also ordering five additional 787s, without stating the variant.
Interestingly, we also saw low cost carrier Flydubai diversifying its portfolio and branching into the twin-aisle sector with an order for 30 787-9s, making it the first LCC in the region to introduce a twin-aisle aircraft into its fleet.
While there was an expectation that Turkish Airlines and Riyadh Air would make some noise in finalizing and announcing sizable orders, on the back of previous rumors and statements, including Turkish Airlines’ reported order for 355 aircraft, and Riyadh Air’s 737 Max order, all was quiet at the Air Show, leaving the industry in suspense for now.
How does this compare to 2021?
How does this compare to the previous Dubai Air shows?
It is important to recognize that since the last show 24 months ago, a lot has happened in the industry, notably moving out of COVID and into a strong recovery position, with global capacity finally exceeding 2019 volumes in late 2023.
Aircraft storage levels have improved significantly since November 2021, previously circa 23% of the single-aisle and twin-aisle passenger fleet was in storage, this figure has now halved.
A similar number of orders were announced at the 2021 Air Show, though the order distribution was very different as single-aisles stole the show, accounting for 97% of all announcements. Contrary to this year’s show, 2021 was effectively dominated by Airbus accounting for 97% of all orders, which included Indigo Partners’ hefty order for 255 A321s.
Recent value trends for new generation widebody passenger aircraft
As a testament to pent-up demand which has caused challenges in aircraft shortage, and can be observed in the order profile at the Dubai Air Show, in recent weeks we have made significant changes to our market values and lease rates for Airbus A350 and Boeing 787s.
Airbus A350 and Boeing 787 market values and lease rates increased significantly after the latest review of the types by the Cirium Ascend Value Review Board in late October, with many vintages seeing double digit percentage increases, particularly for the 787.
Availability of high quality, twin-aisle lift is rapidly declining and these new technology types are the first to benefit.
This is further compounded by supply shortages as OEMs remain at lower production and delivery rates than in 2019. We have captured ample evidence of new and slightly used aircraft transactions to support our revised opinions. Lease rates are also up significantly for both new placements and lease extensions.
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