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Investors make fuel efficient choices
01 September 2008
This year's results have been influenced by the twin factors of increasing fuel prices and concerns over the environment, writes Janet du Chenne.
Let's face it, there are few surprises in this year's Aircraft Investors' and Operators' Poll, but what does stand out is how aircraft are being judged. The cost of fuel and environmental pressures has something to do with why the 787 broke up previous photo finishes between the 737-800 and the A320. So how do investors make their choices?
Appraisers Avitas introduced future market aircraft values to account for how the cyclicality of the market and changing fuel prices affect an aircraft's value. The cost savings that can be made by investing in fuel-efficient, next-generation aircraft makes them less risky than the classics and could pay for the aircraft when the price of fuel decreases.
But the fuel efficiency of next-generation aircraft has two problems: overcapacity in the existing narrowbody sector and uncertainty about when a replacement aircraft will be launched.
Some investors believe that efficiency gains and cost savings...
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