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Request Desktop Appraisal

To contact our joint venture partner Collateral Verifications LLC, call Gueric Dechavanne (+1-203-461-1966) or ch-aviation will send your desktop appraisal request to Collateral Verifications LLC:

 

VALUATION METHODOLOGY AND APPROACH DURING COVID-19 CRISIS

 
MARKET VALUES:
 
1. During the initial period of this crisis, it has been and will be difficult to ascertain the current value trends based on the lack of available transaction data points to review for both new and used aircraft.  It is also our understanding that many of the transactions taking place had already been in work prior to the crisis and may not be reflective of the current market conditions.
 
2. In order to capture some of the aircraft valuation trends, there are factors that can be analyzed to provide certain indications of the potential value declines for each aircraft type.
 
a. Pricing adjustments for aircraft listed as available for sale and/or lease
 
b. Airline Credit Risk
 
c. Monthly Lease Rate Changes
 
d. Residual Value Adjustments
 
3. As many financial institutions and investors use these factors to determine the overall lease-encumbered value of an aircraft, these can also be used as indicators to determine the potential adjustments to aircraft values in the current environment.
 
4. As more trading data becomes available, these value trends will continue to be verified and adjusted as needed to ensure that our values reflect the current market conditions.
 
 
MARKET LEASE RATES:
 
1. For new aircraft, there hasn’t been a significant change in the pre-crisis lease rates as airlines are not necessarily focused on future capacity at this point. Most of the new leased aircraft being delivered in today’s environment were based on pre-crisis rates which were finalized long before the crisis hit.
 
2. The feedback received from most lessors is that lessees have asked for rent deferrals in varying forms, but this is difficult to translate to monthly lease rate declines.  Most of the deferrals are granted on the basis that they will be paid back over the remaining lease term or through a lease extension.
 
3.For used aircraft, there are also very few data points as lessors have not been focused on placing used aircraft coming off-lease in the near term.  The lack of demand from operators has also led to very few, if any, placements of used aircraft in the current environment.  This trend is expected to continue through the end of 2020 until operators determine their capacity needs for 2021 and beyond.  As this trend changes, more data will become available for us to review.  This will provide more details as to the actual lease rate declines which will then be reflected in our publication.
 

 

Aircraft Value Assumption

The following assumptions have been researched and determined:
 
1. Values are expressed in US Dollars and assume that, except for year 1, the aircraft and all of its major components will be in a half-time condition as determined by the then-current maintenance program and TBOs for the respective component.
 
2. Collateral Verifications LLC did not physically inspect the aircraft for this report, nor were their maintenance records reviewed.
 
3. The Aircraft is certified, maintained and operated under U.S. Federal Aviation Regulation Part 91, or similar regulatory authority.
 
4. All mandatory inspections and Airworthiness Directives have been complied with.
 
5. The aircraft has no damage history and is in overall good condition.
 
6. The values represent a single-unit sale and do not take into account any discount that may be applied for a multi aircraft transaction.
 
7. The values reflect a high MTOW and engine thrust aircraft, based on the average specifications of the fleet.
 
8. The lease rates represent the current market operating lease rate being paid on a monthly basis by good credits based on the typical lease terms for the aircraft type and do not include any type of maintenance reserves. 

 

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Request regarding: B777-300(ER) (1125/42219)
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