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A Mil Mi-2 (Registration unknown) being operated by Transkhimavia has crashed near Seversky, Krasnodar Region, Russia on May 21. The helicopter was carrying out field irrigation flights and made a hard landing. The pilot who was the only person on board suffered minor injuries.

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Latest Accident Alert from the Ascend Air Safety team:

Cessna 500 Citation PT-LPZ (msn 500-0015 built 1972) of BFB Leasing SA Arrendadora has sustained damage after it veered off the runway at Campo de Marte Airport, Sao Paulo, Brazil on May 18, and suffered a right main undercarriage collapse. The four occupants of the aircraft were uninjured in the accident. The aircraft was operating a flight from Sorocaba Bertram Luiz leupolz Airport.
 

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Click here to find out why Ascend is the world's most respected provider of aircraft accident information.

Ascend Online Fleets subscribers, click here and view the accident menu 

Ascend Market Commentaries offer unique valuation tools to help understand opportunities and risks in the market, answering questions such as:

- What is the fleet composition of the aircraft type?
- What is the aircraft’s standing in the competitive marketplace?
- How do the aircraft historical market value trends look?

Download your FREE complete sample of the April 2013 Bombardier Global Family Market Commentary here

‘Will the North American commercial jet fleet experience growth in the next ten years or will the next decade be one solely of high replacement and minimal growth for this region?’

The passenger airline fleet in North America has stagnated somewhat over the past few years as the Major airlines in the US in particular have finally recognised the virtue of capacity control. Data from Ascend Online Fleets* indicates that the jet fleet at the end of 2012 numbered some 5,800 aircraft, actually 5% fewer than 5 years previously. The average age is 11.5 years, which is only marginally higher than the global average age. With almost all the 900 deliveries in the past five years being for replacement, only 1,277 of the aircraft in North America are now 15-years or older, although another 1,754 are in the 10-14 year old bracket.

Ascend’s fleet forecast model predicts the fleet to grow 15% to around 6,700 units by the end of 2022. There is a current orders backlog of 1,900 and we predict the eventual delivery of around 3,400 new aircraft and retirement of some 2,500 over that same ten year period. So while we are expecting some element of fleet growth to resume, we do expect the larger element (74%) of new deliveries into the region to be replacement aircraft, as capacity discipline continues to be the by-word for airlines in North America.

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‘How does Ascend see the value of the A320ceo being affected when the A320neo comes into production?’

We do not envisage any impact on the base values of the A320ceo with the introduction of the Neo. An important assumption is that the OEM obtains a meaningful premium in the pricing of the Neo compared to the Ceo.

New technology is essential to the success of the commercial aviation sector, with the long lead time there is an orderly introduction into service and hence a known and manageable risk to investors in aircraft. Our future value models incorporate a factor to account for the faster depreciation that aircraft built near the tail end of production so we would see no reason to change our base value models.

Click here for more information on Ascend's valuation and appraisal services.

Sunday 12th May - Tuesday 14th May, 2013

ISTAT Asia covers industry issues addressed by prominent specialists. Topics have included the changing environment for aircraft and their financing as well as reviews of current markets and industry forecasts.

Paul Sheridan, Head of Consultancy Asia, will be moderating the Regional Jet Panel.

Olga Razzhivina, Manager of Valuation Services, will be on the Appraiser Panel.

Monday 15th - Wednesday 17th April, 2013

Cargo Facts Asia, set to take place April 16-17 in Hong Kong, will bring together the world’s aviation community for meaningful networking and strategy discussions centered on the Asian market.

Paul Sheridan, Head of Consultancy Asia, will be part of the "Widebody Freighters - Today's Supply-and-Demand Reality" Panel.

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Ascend Market Commentaries offer unique valuation tools to help understand opportunities and risks in the market, answering questions such as:

- What is the fleet composition of the aircraft type?
- What is the aircraft’s standing in the competitive marketplace?
- How do the aircraft historical market value trends look?

Download your FREE complete sample of the Bombardier Global Family Market Commentary here  

This sample from October 2012 will soon be followed by the most recent (April 2013) Market Commentary – allowing you to gain a full picture of past, current and future market activity for the Bombardier Global Family.

Click here for more information on Ascend Market Commentaries

Business Day Live 

Wednesday March 20, 2013

'Are the emerging OEMs a serious threat to Airbus and Boeing's duopoly?'

The emerging OEMs are clearly a threat to the Airbus and Boeing duopoly, but the real question is how big a threat? Bombardier’s development of the CSeries, which competes with Airbus and Boeing’s established single-aisle products at the lower end, has already stimulated Airbus and Boeing to launch the re-engined A320neo and 737Max, which in the absence of CSeries may not have occurred. CSeries will also capture some market which in its absence, would probably have gone to Airbus and Boeing. Looking beyond Bombardier, we also have COMAC and Irkut looking to enter the single-aisle market with their C919 and MS-21. Whilst each of these programmes face development and entry into service challenges, it seems likely that both will deliver on their market proposition and some volume of aircraft will be delivered to airlines, albeit most likely in local and adjacent markets. However, in doing so both OEMs will again impact to some extent on Airbus’s and Boeing’s sales of A320 and 737 family aircraft. They will also have gained experience of design, manufacture and delivery of large commercial which they will leverage into their next programmes, either widebody or single-aisle.

Also, let’s not forget that Airbus was once an emerging OEM, faced with a virtual single-aisle duopoly shared by Boeing and McDonnell Douglas. Airbus was forced to innovate with the A320 (FBW, etc) and continued to innovate to achieve the position it shares with Boeing today. McDonnell Douglas failed to innovate and were forced out of the market (through acquisition by Boeing). To a similar extent Bombardier and Embraer “innovated” their way into the regional market and forced the incumbent OEMs to exit.

Finally, these comments seem to suggest that each market sector can only support two OEMs. However, market volumes today are much larger than historically (both in fleet and new delivery terms) and with growth expected to continue we will see ever larger fleets and more deliveries. The overall opportunity is thus much greater and that suggests there may be space for one or more new entrant OEMs to succeed. It’s really just a matter of when, rather than if.
 

In June 2012, the McKinsey Global Institute published research showing the centre of gravity of the world economy and how it has been steadily moving eastwards since 1950. They estimated that it is currently somewhere over Russia and would continue to head east as China and India continue to urbanise. Using the Ascend Online Fleets database we can plot a similar chart. It shows how the centre of gravity (calculated by weighting the numbers of commercial jet aircraft flying in each region by their longitude) of the world’s fleet is currently somewhere over North Africa. Between 1976 and 2001 the COG oscillated in a reasonably narrow band but since 2001 it has been moving to the east. Using Ascend’s fleet forecast, this is expected to move more and more in this direction over the next 20 years. By latitude it has stayed remarkably consistent at around 30 degrees north of the equator. The development of the world fleet is still lagging behind direction of the global economy, due in large part to the relative lack of airport and aviation infrastructure in the east but it is hard to see what will stop this trend from continuing.

Doing the same analysis for leasing companies would show a similar trend but probably with more of a time lag. Assuming that the ILFC sale closes, 30% of the world’s leased fleet will be owned by Asia Pacific companies by the end of 2013 and this number should keep growing. The question is, if the COG of the world’s fleet by numbers and by ownership keep moving to the east, how long before more leasing companies follow suit?

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The recent failure of several airlines has added more aircraft to the idle fleet – but how has this affected the overall total? A download from Ascend Online Fleets* shows 190 commercial jets going into storage to date in 2013 (this excludes the 787 situation). These aircraft have an average age of 18 years.

However, the fluid nature of the stored total is highlighted by a net increase of just 21 aircraft –less than 1% - to just over 2,240. Aircraft leaving storage or being parted-out have kept the stored fleet at around 10% of the total airline fleet.

A quarter of those newly parked are 737 Classics, taking the idle fleet past 340 and keeping it firmly in the top spot by type. Many of the recent additions came from Batavia Air in Indonesia, typical of a carrier who in previous years would have been expected to build a fleet with used types like the Classic. But the availability of new or young aircraft has reduced demand for the previous generation. The A320 family saw 35 parked, due to the cessation by Bahrain Air and Spanish charter airlines Orbest Espana, plus cutbacks at several smaller European carriers, yet the net total went down by 5 aircraft to 170. 11 were parted out but there is still a very active leasing market as well.

It is difficult to see much of a future for many of the 220 MD-80s, 144 CRJs or 138 747s which lie idle. Yet what about the 31 Airbus A330s? A type in full-operation until very recently, but which has suffered from airline failures, lease returns and early aircraft being replaced. Some part-outs are now occurring, but will the 787 situation lead to a short term need for interim lift?

* Ascend Online Fleets provides access to real-time premium quality aircraft and industry data. It houses instantly-accessible details for over 100,000 commercial aircraft, ranging from regional jets up to the largest widebody airliners – in addition to over 50,000 business aircraft and 80,000 helicopters.

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