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  • Writer's pictureGary Crichlow

Analysing the Japanese Fleet

Updated: May 11, 2023

Ahead of Airline Economics Growth Frontiers in Tokyo, we analysed the development in the Japanese fleet and related aircraft values using VV Aviation data.

Aircraft Value Changes and Growth

Boeing 737-800

The Boeing 737-800 accounts for one fifth of Japanese operated commercial passenger Widebody and Narrowbody aircraft. 36% of all flights into, out of and within Japan during 2022 were conducted using the type.

Having benefitted from the grounding of the 737 MAX in 2019, Market Values suffered in 2020 due to the drop in demand during the pandemic, and further downward pressure was exerted in 2021 as the MAX re-entered service. Since 2021, stronger than expected demand recovery and the 737-800’s desirability as a freighter conversion platform have resulted in some positive upward Market Value movement. The long term Base Value trend is decreasing slightly as it incorporates the Market Value downward movement since 2020.

Airbus A321 Neo

As a new technology aircraft, the A321neo is in high demand worldwide. It also enjoys the advantage of having a market all to itself: its main competitor, the Boeing 737 MAX 10, is still undergoing certification and there is no other Narrowbody of similar capacity in development at present. As a result, A321neo Market Values had a strong recovery since 2021.

Boeing 787-9

The Boeing 787 is the leading Widebody in the Japanese commercial jet market. The -9 variant accounts for 10% of the Japanese operated fleet and order backlog. 18% of flights in 2022 into, out of and within Japan were operated by the type. Boeing 787-9 Market Values were impacted during the pandemic, but new technology aircraft showed the earliest signs of recovery. Indeed, as global passenger traffic has recovered faster than previously anticipated, so too has the need for aircraft to meet demand.

At the same time, the available supply of new aircraft has constricted, with both Widebody manufacturers struggling to increase delivery rates and Boeing in particular facing delays with its 787 deliveries. This has prompted the market to look for in service aircraft as an interim solution, creating upward pressure on Market Values, particularly for younger, new technology types.

Airbus A350-900

The Airbus A350-900 is a relatively new entrant to the Japanese Widebody fleet, with Japan Airlines currently operating 16 of the type, with a further two on order and 13 of the larger A350-1000 set for initial deliveries in 2023. As a new technology Widebody, the type is increasingly sought after as global international traffic recovers.

Flight Activity Analysis

Flight activity into, out of and within Japan was strongly impacted by the closure of borders in response to Covid-19. The number of flights in 2022 was 27% below 2019 levels, and the number of routes served is 33% below 2019 levels.

The analysis indicates that the Japanese travel market is characterised by a number of city pairs with extremely high frequency services. By comparing the relative year-on-year changes between flights and routes, it can be seen that the number of flights tended to be cut first and more drastically than the number of routes. On the other hand, flight activity levels on the remaining routes have also been restored first, with recovery in routes served lagging by one year.

The recovery in flight activity has largely been served by new technology aircraft, primarily the Boeing 787 and Airbus A321neo. The Boeing 737-800 remains a stalwart, while Boeing 777 has been steadily replaced as an active participant in the Japanese market. Looking ahead, the Boeing 737 MAX and Airbus A350-900 are growing their share of the market very strongly, albeit from a small fleet base.

Download the full infographic here.

VV Aviation Data as of April 2023

Disclaimer: The purpose of this blog is to provide general information and not to provide advice or guidance in relation to particular circumstances. Readers should not make decisions in reliance on any statement or opinion contained in this blog.

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