Anyone who has walked into a used-car dealership knows about the risks of being sold a lemon. When it comes to aircraft, however, it is the newer models that seem more likely to leave owners stranded.
The price tag for a 10-year-old Airbus A320-200—the backbone of the world’s short-haul fleet—has risen 10% since August, according to appraisal data from aviation-analytics firm Ishka. The popularity of trusty clunkers is rising because of issues affecting the newer version of the plane, the A320neo, introduced in 2016.
And it isn't an isolated case: The rival engine to the GTF is also suffering from durability issues. Ever since Boeing botched the development of the 787 Dreamliner in the 2000s, aerospace firms have been battling to rectify defects. As engineering more fuel-efficient jets keeps getting harder, future models may become even less reliable upon introduction.
The implication is that midlife jets may have a permanently higher “residual values,” which is good for lessors like AerCap and Air Lease Corporation, as well as aircraft asset-backed securities.
Excerpt from WSJ
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