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22 Sep 2020

High utilisation keeps E175 lease rates buoyant


Strong utilisation by US operators has kept E175 lease rates firm through the pandemic, say regional aircraft lessors.

Overall, regional aircraft sources estimate that E175 lease rates have dipped by around 5%  through the pandemic – at a time when other regional jet rentals have fallen as much as 50% – though caution that there have been “very, very few transactions at all.”

Assuming the lease correction is accurate that would put current rentals at approximately $120,000 for six-year-old E175 aircraft and approximately $80,000 for a fifteen-year-old aircraft.

These are markedly gentler than drops predicted on the E175’s larger cousin, the E190, where lessors estimate a decline of between 20% to as much as 50% for new monthly lease rates (see Insight: ‘E190s stave off retirement as carriers clinch cheap lease extensions’).

“What we are actually seeing is that E175 valuations do not differ too much at all from pre-Covid levels,” says James Bennett, director of sales & marketing at AerFin. AerFin is the largest non-OEM owner of E175 used serviceable material (USM) after its acquisition of 15 Saudi Arabian Airlines’ E175-LRs in 2017. “In fact, if anything, they were in the single-digit percentage movements of between -8% and -2% – definitely more stable than other assets through this pandemic. That said, it’s difficult to give meaningful valuation trends when there’ve been so few transactions on any platform.”

To read the full article produced by Ishka, click here.