The
fvDynamics system has been developed by IAA to provide methods which
reflect known market realities in the forecasting process, and to
give lenders and investors an analytically robust alternative, based
on probability, simulation and our decades of experience.
The system is basically a virtual model of the future commercial
aircraft market, and it has been designed with a view towards assisting
asset-backed investors with planning for the future based on realistic
market-driven assumptions.
Our fvDynamics system and simulation routines have taken into account
re-engined, updated versions of A320's and B737's since 2005, and,
as it was clear to us in 2007 that a wobbly banking system was bad
for the aircraft market too, our forecast accuracy has been second
to none.
At
the request of a well-respected aircraft investor, we've sent several
fvDynamics forecasts from 7 years ago so they could independently
check them against their own current view of the market.
The results were as follows:
Aircraft Type Forecast
Error
A320-200 +10%
B737-800 Winglets +10%
A321-200 +10%
A330-200
0%
A330-300 0%
B777-300ER 0%
So, based on their best information about current market values
(for aircraft types which they own themselves), we were only 10%
high for the narrowbodies, and right on for the widebody aircraft.
We wonder how some other firm's forecasts would compare to
this standard of performance.
fvDynamics
---
Future Market Value Forecasts over
20 years for commercial aircraft,
including the related probability
distributions.
--- Lease
Rate Forecasts over 10 years.
--- Scenario-based,
logical parameters.
--- The simulation quantifies our analytical
experience related to the market
dynamics of aircraft asset
risk.
Lessor Trading Model
--- The entire operating lease term
analyzed in detail, for
an
unlimited number of aircraft.
--- PDP
payments included if necessary.
--- Variables include all parameters
important to a lessor's business,
which allows custom "what-if"
analysis.
--- The result includes the balance sheet, cash
flow statement and IRR,
all as a function
of the timing of aircraft
sales, and summed
over any portfolio.
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