GTF Woes Denting A320neo Values, Lease Rates

With no sign of the Pratt & Whitney powered A321neo moving any closer to revenue service, there’s a good chance that the recently certified LEAP-1A variant of the A321neo could do so first.

The current A320 family sports lower long term residual values and lower lease rates than the comparable 737NG family.

Given the shambles of the GTF engine thus far on the A320neo, asset values of the type are starting to tumble, just a year after entering service. It looks like the 737 MAX will extend its better value proposition over the A320neo just as the 737NG did over the older A320ceo.

Could airlines be more inclined to select the LEAP-1A over the ailing GTF engine on the A320neo? Or could we witness Boeing battle back with new 737 MAX orders given its famed reliability and value thesis with CFM International?

Image Courtesy of Boeing

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