Putting a price tag on the Superjet

Now that the first Superjets are gradually taking their roles in the fleets of the airlines, it is time to start following their market value. In this short article we try to put a buyer’s price tag on the Superjet based on some crude methodologies.

The theory

In theory, an aircraft’s value can be determined in two basic ways:

1. Based on the aircraft’s operating costs and revenue generating potential. This would show the aircraft’s “base value”
2. Based on the balance of supply and demand for the aircraft. This would show the aircraft’s “market value”.

Thefirstmethodwouldbefollowedbyanairlinewhohastofind the most appropriate aircraft for its network and schedule. The airline would calculate what revenue a particular aircraft would generate. Then it would estimate the operating costs of the same aircraft on the same routes and schedule, excluding the costs of ownership. Finally, the airline would calculate how much ownership costs it could afford to bear, and this would determine the price that the airline is willing to pay for the given aircraft.

The second method would be followed by an aircraft broker. He or she would look at the number of available aircrafts on the market in the selected aircraft category (e.g. 100 seat regional jets) and the asking price for these.  Then he or she would assess how many aircraft and what prices the buyers are looking for in the same segment at that particular time and the foreseeable future. He or she would also look at prices achieved during recent transactions for comparable aircraft. Based on this information he or she would estimate the price and quantity where the supply and demand would meet.