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18 Nov 2019

AerFin on the E1 E-Jet secondary market


The secondary Embraer E-Jet E1 market has been bustling with activity, with the OEM recording around 240 operator transitions over the past five years – around 15% of all E-Jets produced to date.

In the last three years alone Ishka estimates that 131 used E1s moved to new commercial operators (excluding aircraft transferred between airline subsidiaries).

But with major E1 E-Jet operators preparing to phase out the type in bigger numbers, many lessors worry lease rates could come under pressure as early as next year. Ishka speaks to AerFin's Michael Brain about the recent trends in the secondary E1 market.


Lease Rates to Date

Ishka understands that monthly lease rates for mid-life E190/E195 E1s (10 to 12 years) have hovered between $120,000 and $140,000 in recent months, with one lessor reporting a lower ballpark of $110,000 and two others suggesting lease rates can sometimes go as high as $160,000.

In terms of regional marketability, AerFin’s Regional Sales Manager Michael Brain tells Ishka that separating the smaller E190 family and the E170 family is “quite important.” “The E170 [family] outside the United States isn’t seeing a huge amount of demand anymore,” Brain points out, underlining that pilot scope clause limitations and the economics of feeder routes mean the E170/E175 is “very well suited for the US market.”

Outside the US, Brain sees demand for E170/E175s increasing in Africa and Asia-Pacific in the coming years: “Particularly Africa, we are going to start seeing some demand for the E170/E175 there, there is a lot of ageing SAAB and BAe 146 aircraft in these developing markets.”


Floodgates opening for E190 / E195s

“There’s an abundance of E190 / E1915s set to hit the market over the next few years […] with this in mind we expect to see lease rates to drop and lessors are going to have to consider lease rate reductions in order to place them with new, second-tier operators,” points out AerFin’s Michael Brain. The AerFin executive believes that the reason many airlines in Europe are leasing used E1s is that lease rates “are going to be so attractive for them.”


For the full article, click here.