Changes are required within the appraiser community to keep pace
with market activity
Avolon, the international aircraft leasing company, today publishes a
Discussion Paper, Values and Valuers, which explores the business
of aircraft appraisal and valuation in the aviation industry. The Paper,
which is the latest in a series of Discussion Papers published by
Avolon, offers guidelines on what to look for when making the key
appraiser selection and explores the role of appraisers from a broader
industry perspective, identifying areas where change is required to meet
the future needs of the industry.
Amongst the major conclusions reached in this Paper are:
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Automated on-line valuation products provide a cost-effective and
speedy service for a range of applications, but their generic nature
can mask significant value variances by excluding critical information
-
A Desktop Appraisal will often provide a more detailed and accurate
valuation than an on-line service and provides an opportunity for
dialogue between appraiser and client which helps ensure that the
resulting analysis is fit for purpose
-
The wide range of value opinions provided by appraisers, even for the
most liquid aircraft, requires their customers to be conversant with
the different methodologies and assumptions that are offered
-
In order to merit serious consideration as value providers, appraisers
must conform to the ISTAT definitions and code of conduct for all of
the relevant constituents of the range of appraisals and valuation
services that they provide.
-
Changes are required in the appraiser community to keep pace with
current levels of market activity, and also to meet the standards of
rigour, consistency and transparency that will be demanded by new
investors seeking to enter the sector as aircraft complete the
transition from alternative to mainstream investment class.
-
Key areas of focus for appraisers going forward include: demonstrating
track record of forecasting accuracy in a verifiable way, increased
diligence related to current values, moving to cutting edge IP,
becoming thought leaders in the industry, expanding ISTAT
accreditation, and greater collaboration between customers and
appraisers.
Dick Forsberg, Avolon’s Head of Strategy commented:
“This paper represents the latest issue in our analysis of key issues
impacting the aviation industry. Exploring the impact of industry
trends, such as appraisals and valuation, is central to strategic
decision making at Avolon. We have assessed one of the industry’s most
topical issues given the significant influence the appraiser community
wields within the industry. We hope that the Paper will be helpful to
financiers, investors and lessors when choosing an appraiser, provide
insight into the future of the appraisal process and act as a catalyst
for change.”
The full Discussion Paper can be downloaded from the Our Thoughts
section of the Avolon site at: http://avolon.aero/our-thoughts/
ENDS
About Avolon
Headquartered in Ireland, with offices in the United States, Dubai,
Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and
lease management services. Avolon is a wholly-owned, indirect subsidiary
of Bohai Leasing, a Chinese public company listed on the Shenzhen Stock
Exchange. As of December 31, 2015, Avolon’s owned, managed and committed
fleet, together with the Hong Kong Aviation Capital fleet, comprised 418
aircraft with an average owned aircraft age of 3.2 years. Together,
Avolon, Bohai Leasing and HNA Group is the world’s fourth largest
aircraft leasing business by asset value. See www.avolon.aero
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