Please start here.  Moxy Airways and 60 CS300s?

The answer is yes, this is real.   The deal leaked before it was expected.  The airline is apparently securing its financing.  Mr. Neeleman will have no problem with that at all we expect. He is a highly bankable airline investor and entrepreneur.

Here are some items that are important to consider.

  • This deal is pre-CSALP.  In other words, this a Bombardier sale.  This news sends a powerful message of confidence in the CS program.
  • Mr. Neeleman is known as a savvy buyer. He has been a buyer of Embraer‘s E-jets, most notably at Azul. But also at Jetblue.
  • By moving so boldy for 60 (30+30?) fleet planners at American and United will be shifting uneasily in their seats.  Delta has the disruptive CS coming.  Moxy will add another squeeze focusing on secondary cities.  Jetblue itself is not immune from Moxy either. Consider the impact on Spirit and Allegiant as well. Moxy will likely be focused on exploiting the “widebody feel” of the CS300 and have a higher level experience.  This is the Neeleman M.O.
  • By having a 2020 date, the likelihood is that the Moxy aircraft will come from Alabama.  Since the Alabama FAL is US-focused, and they have 75 for Delta (+75 options) and now the Moxy deal, that FAL will have a sizable backlog.  The plan is to start at rate four, so firm could provide at least 26 months of production.
  • Consequently, airlines that have expressed interest in the CS, such as Jetblue and Spirit, may have to move adroitly if they want slots.
  • On the other hand, if this is the start of the long-awaited CS demand wave, a long at rate four might help the E2 program.

It is excellent news for US air travelers that Mr. Neeleman is coming back into the market.  Competition is what the market needs after consolidation.

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