The Airbus A320neo and Boeing 737MAX will dominate the narrowbody market, as per the latest IBA report. The report showed that the global capacity recovery towards 2019 has slowed in the second half of 2022 but will continue in 2023 and this slow recovery rate is due to Asia Pacific, which is still at just 55% of the 2019 level as on October 2022.
IBA also throws light on how the narrowbody market values have broadly recovered to pre-pandemic levels. Citing this with an example, the 2022 base value of the new A320neo is 3.5% higher than 2019, and the 2022 and 2019 values of a Boeing 737MAX 8 are on par. By contrast, mid-life aircraft values are recovering at a slower pace, with a 15-year-old A320-200 around 25% behind 2019 levels.
Sharing data on lease rates, IBA experts explained that new aircraft rates are rising to above 2019 levels. This is largely driven by a combination of short supply and rising demand and interest rates. Overall, narrowbody lease rates are recovering and lease rate factors are rising due to the cost of borrowing. Previous generation narrowbody lease rates have followed a slower path of recovery, but are set to benefit from new aircraft supply constraints.