NEW YORK—(BUSINESS WIRE)—Fitch Ratings has published a report detailing an analysis of historical trends in commercial passenger aircraft markets during downturns. The results confirm Fitch’s view that certain young/in-demand aircraft typically remain highly liquid in times of economic distress. The study focused on storage times, percentage of the fleet stored, price declines and differences among aircraft types and ages to determine which aircraft types fare best in difficult economic situations.

Fitch’s analysis illustrates that average storage times for popular models of passenger aircraft tend to be short. Average and median storage times for aircraft younger than 15 years old have remained around or below six months dating back to 1996, and well below one year through both the 2001 and 2009 recessions.

A consistent factor when examining stored commercial aircraft is that they are notably older than the global aircraft fleet as a whole. The average age for parked aircraft hovers around 20 years, even increasing toward 25 years prior to the last economic downturn. However, the average age of the in-service fleet is around 10-11 years, with some minor variations depending on the economic cycle.

The results of this analysis support Fitch’s ratings processes for debt secured by aircraft, including aircraft enhanced equipment trust certificates (EETC) and aircraft operating lease ABS transactions. The results of the analysis are incorporated in Fitch’s aircraft EETC and aircraft ABS criteria, and some of the results supported EETC criteria changes earlier this year, including the possibility of assigning ‘AA’ ratings to certain senior tranches.

For more information please see the Aircraft Collateral in Downturns (Passenger Aircraft as Collateral in Secured Debt Transactions) report published on Sept. 2, 2016, at www.fitchratings.com.

Additional information is available at ‘www.fitchratings.com’.

Related Research

Aircraft Collateral in Downturns (Passenger Aircraft as Collateral in Secured Debt Transactions)

https://www.fitchratings.com/site/re/886723