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By Michael Graham, Valuations manager at Ascend by Cirium
In April, Ascend by Cirium launched the Commercial Aircraft Market Sentiment Index (CAMSI). The monthly Index tracks market sentiment and trends of values and lease rates through a survey of key market stakeholders, including lessors, banks, OEMs, part-out shops, airlines and brokers.
Within CAMSI, we utilize a NPS Index methodology – calculated as the number of respondents replying ’too high’ or ‘trending up’ minus those replying ‘too low’ or ‘trending down’, divided by the total sample response to that question. Scores in the 40% to -40% range broadly indicate stability, those below -40% can be considered to indicate a negative sentiment and those above 40% indicate a positive sentiment.
In the November 2021 CAMSI survey, respondents were asked to give their opinions on aircraft lease rates for the final time this year. Much like values in October, the picture regarding the trend for lease rates this month continues to be positive, both for new-build single aisles and increasingly, for 10-year-old vintages. Of particular note was the uplift in the NPS score for the Boeing 737 Max 8, which was over 25 percentage points higher, compared to September’s survey; an indication that the leasing market for the type appears to be strengthening, following its return to service.
However, this increase in positive sentiment in November has not been limited to new-build single-aisle aircraft. For the first time since April, respondents now view the direction in lease rate trend for 10-year-old vintages of both the Boeing 737-800 and Airbus A320-200ceo as positive, suggesting the rising tide of optimism has been lifting ‘all boats’, or indeed aircraft.
Looking at twin aisles, while the overall picture is nowhere near as positive as that for single-aisles, there is still some evidence of an improvement in sentiment.
Following feedback from respondents, we have swapped the Airbus A350-900 for the A350-1000, given the smaller aircraft’s fleet size and greater importance to investors. While the NPS score for the -900 remains in negative territory, it is to a much smaller extent than the -1000 was previously. In contrast, sentiment towards the Boeing 787-9 is positive, with an increase in NPS score since September. For 10-year-old aircraft, NPS scores for both the Airbus A330-300 and Boeing 777-300ER continue to be negative, although we are seeing a gradual improvement trend.
In our “bonus question” for November’s survey, respondents were given a choice of factors likely to impact future aircraft values, and then asked to rank them from one to seven. New technology and fuel prices were seen as having the greatest impact; a response that we see as highly rational, given that the cost of jet fuel is a key variable for Ascend’s future aircraft base values. However, environmental legislation was also seen as potentially impactful, followed by consumer spending patterns. In the immediate future, it remains be seen whether the perceived impact of the new Omicron variant on global travel markets could feed through to values and lease rates.
We are always looking for further respondents to reflect all aspects of the market, who can then benefit from receiving the full set of results (above is only a top line summary). The CAMSI survey takes only 3 minutes to complete, yet provides respondents with the most comprehensive picture of the aircraft value market trends available. If you would like to participate, please contact michael.graham@cirium.com. Participants will receive a complete and detailed analysis of the survey results, with ten or more graphics included.
