Quantcast
premium Archives »
Commercial Aviation Analysts

premium

The first aircraft (picture) was delivered to the airline on October 15th 2007 and manufactured in 2006.  It is on lease from Doric Asset Finance through October 2017.  Reports from various sources indicate that the lease is not likely to be extended. What happens next?

Welcome to AirInsight Premium content. This page is only available to active members.

Already a member?
LOGIN HERE

Interested in becoming a member?
GET STARTED TODAY

Aerospace is a technology-heavy business.  But the pace of technology change is accelerating.  Consider just 15 years ago that composites were too expensive and unproven for aircraft structural applications, large geared turbofans were a lab experiment, hybrid cars were new, flip phones were state of the art, and the hard drive on my computer had less storage than my USB thumb drive today.  And technology continues to accelerate at a faster pace.

Welcome to AirInsight Premium content. This page is only available to active members.

Already a member?
LOGIN HERE

Interested in becoming a member?
GET STARTED TODAY

The influence of the US scope clause on the regional jet OEMs is significant.  The following chart illustrates how the sheer size of the US regional market dominates.   Any regional jet OEM seeking high production volumes must ensure the aircraft offered can operate within the US market.

Welcome to AirInsight Premium content. This page is only available to active members.

Already a member?
LOGIN HERE

Interested in becoming a member?
GET STARTED TODAY

The big two OEMs are facing an interesting situation.  Wide-body demand is down for several models, causing production cutbacks, while narrow-body backlog is at record levels.  The result is that the OEMs are relying on narrow-body sales for cash flow in the near term, and both OEMs will increase production rates to levels we believe will be unsustainable through the next decade.

Welcome to AirInsight Premium content. This page is only available to active members.

Already a member?
LOGIN HERE

Interested in becoming a member?
GET STARTED TODAY

Earlier this week, at the Airline Economics Growth Frontiers conference in Dublin, AerCap’s CEO Angus Kelly indicated that “we see big deferrals in the wide body market.”  He indicated that in the short-term, there is over-ordering, and that some of the big airlines are chasing the same passengers.

He implied that the order books at Airbus and Boeing don’t reflect "what is going to be delivered" and that some airlines may not take their orders.  We’ve recently seen Airbus cut A380 production and Boeing cut 777 production, and defer an increase in 787 production as wide-body orders have cooled.   While Mr Kelly's forecasts large-scale order deferrals and doesn’t trust the official backlogs from the OEMs, he cites that fundamentals such as traffic growth continue in the right direction, and he is not concerned about the number of overall passengers - the question will be who is… Continue reading

The industry adage is that airlines order aircraft in good times and take delivery of them in bad times.  Timing, as always, is everything.   Ordering aircraft is something airlines do with a long-term view.

This chart shows how the long term book to bill ratio has been tracking. As we can see, 2017 looks likely to go below 1:1. This is a cyclical business and we definitely in the midst of a down swing.

Welcome to AirInsight Premium content. This page is only available to active members.

Already a member?
LOGIN HERE

Interested in becoming a member?
GET STARTED TODAY

1 2 3 25
Enter your email address for RSS feed