issa special session-aircraft end of life pofitability v01
TRANSCRIPT
2nd of June 2015
How to take the right profitable decision between selling older aircraft as a whole, or dismantle to sell all parts?
Ayce CELIKELPresident, ENVISA (Aviation and Environmental Consulting)
DG AEROBAY
ISSA
Presentation OverviewAircraft coming end of life
Possible futures: best ways of profiting the asset
Aircraft coming to End of LifeLegislation/regulations on End of LifeEnvironment Concerns/Climate Change“Peak everything” – resource scarcity
The Industry right now…
Retirement Trends
For the first time, annual retirements are expected to reach over 1,000 aircraft by 2023
Retirement Forecast (another view)
Almost 15,000 aircraft will be retired in next 20 years, representing 63% of today’s fleet.Consequently, 40% of all deliveries will supportfleet replacement, with the remaining 60% representing industry growth
Avolon World Fleet Forecast 2014 - 2033
Aircraft parted-out value What does it mean ?
Aircraft and main components valuation on 2nd hand MarketCost assessment and profit forecast of a dismantling operation
DECISION AIDS FOR AGING AIRCRAFT
A SERVICE PROVIDED BY AEROBAY...
Aging aircraft in your fleet ?
• Underused aircraft• Long-term aircraft parking• End of lease• Cost efficiency loss with old
generation aircraft• Drop of the aircraft residual value
Aircraft Owners, Objectives ?
Gain in competitivenessMaximize the economical value of fleet assetsIncrease in cash through operation on under-used aircraftOptimize the spare parts inventory level for the aircraft maintenanceReduce maintenance costs
Airlines &
Lessors
TIME TO STUDY THIS ALTERNATE PROFITABLE SOLUTION
Data used for this analysis
The valuation report is based on the following assumptions:
The aircraft residual value: Done by experienced appraisers, certified by ISTAT (International Society of Transport Aircraft Trading).
The aircraft parted out value has been calculated using the following:
Aircraft Technical Evaluation, done by the Aircraft Acquisitions and Return Operator Desk Engines LLPs sheet (residual potential (cycles) on each
LLP) OCCM sheet (On Condition Cyclic Maintenance)Demand and availability on spare parts market
Accurate technical data
AEROBAY PERIMETER
ACSEND PERIMETER
General Methodology
ENGINES
COMPONENTS
LANDINGGEARS A.P.U.
Residual MarketValue
Cycles
$FLMV
ZTSOMV
OH_1 OH_2Half Life (second)Half Life (first)
HLMV
Aerobay MarketValue
The Current Market Value
The current market value takes into account the depreciation rate, the number
of cycles for every component and the market value on the 2nd hand market (offer
/ demand)
SCOPE OF WORK (all Part Numbers)
Full Life Market Value (FLMV)Zero time Since Overhaul Market Value (ZTSOMV)
Half Life Market Value (HLMV)
Resale Aircraft Valuation Residual Aircraft Valuation after Dismantling
Total cost of A/C Dismantling/RecylingResale value of Engines
Resale value of Landing Gears
Resale value of APU
Resale value of Cabin(business seats, Galley eqts)
Resale value of Components (avionic, fuel, hydraulic, elec,..)
-+
vs
Aircraft residual value report
++++
A report to take the best financial decision (keep, resale or dismantle your aircraft)
Ask for a detailed report on aircraft residual valueAll Aircraft models can already be analyzed :
Airbus family : A300-600, A310, A320, A330, A340Boeing family : B737, B747, B777, B767, MD11Airbus ATR family : ATR42, ATR72Embraer family : ERJ135, ERJ145, ERJ170, ERJ190Bombardier family : CRJ100/200, CRJ700De-Havilland : Dash8Fokker : F50, F70, F100
… and all business jet aircrafts
Go ahead
