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AirAsia Defers 8 More A320; Airbus To Cut Prod'n?  
User currently offlineFlybeq400 From United Kingdom, joined Jan 2005, 222 posts, RR: 0
Posted (4 years 11 months 2 weeks 3 days 3 hours ago) and read 5192 times:

AirAsia has announced it is to defer 8 of the 24 A320s they were due to receive in 2011. This is in addition to the previously announced deferral of 8 of the aircraft they were due to receive in 2010.

Also they are trying to put the 737's they still operate (mostly at Thai AirAsia and in Indonesia) back to the lessor (mostly GE) and sell the ones they own outright. (2 are going to VivaAerobus in Mexico).

Bloomberg predicts that, since 2 of the biggest aircraft leasing companies are in difficult situations right now (ILFC, part of AIG; and CIT) that Boeing and Airbus may have difficulty maintaining current production levels. They speculate that Airbus may cut their A320 series production further (they have already gone from 36 to 34 per month), maybe to 31.

Any views on who might be able to take these excess A320's next year and 2011 if Airbus maintains production levels? I know there is an order backlog, but its more a question of who has cash on hand or financing in place to put these birds to work  Smile


Sources: Bloomberg, Malaysia Star, Reuters

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVz2Hncq.diw
http://www.reuters.com/article/rbssI...tilitiesNews/idUSKLR50623020091004
http://biz.thestar.com.my/news/story...10/5/business/4836811&sec=business

6 replies: All unread, jump to last
 
User currently offlineOyKIE From Norway, joined Jan 2006, 2751 posts, RR: 4
Reply 1, posted (4 years 11 months 2 weeks 2 days 18 hours ago) and read 4854 times:



Quoting Flybeq400 (Thread starter):
They speculate that Airbus may cut their A320 series production further (they have already gone from 36 to 34 per month), maybe to 31.

Interesting news. It seems likely that we will see a reduction of narrowbodies from both Airbus and Boeing. That might be a good thing (short term) as otherwise it might be to many airplanes available keeping a pressure on RASM. But long term they risk loosing engineering resources making a ramp up harder after the current downturn. They will also risk that the engineers go to Japan, China and Russia.



Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlineFrmrCAPCADET From United States of America, joined May 2008, 1718 posts, RR: 1
Reply 2, posted (4 years 11 months 2 weeks 2 days 12 hours ago) and read 4378 times:

The order books of the last ten years has many of the characteristics of a bubble. I trust the airlines and the manufacturers will be spending much time working this all out.


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 3, posted (4 years 11 months 2 weeks 2 days 12 hours ago) and read 4292 times:

This was partially discussed in this thread:

Aircraft Financing - Brutal (by PlaneAdmirer Sep 15 2009 in Civil Aviation)?threadid=4550740&searchid=4551737&s=airliner+%26+financing#ID4551737

The following is the from that thread:

Interestingly today's WSJ reported on possible production cuts at Airbus with the primary source being Tom Enders (those who criticized the UBS research earlier in the week may want to reconsider now that it has been confirmed by Enders). Here are, IMHO, the good quotes:

"But airlines' deteriorating financial conditions and carriers' troubles funding airplane purchases amid the credit crisis could force Airbus to throttle back, Mr. Enders said in an interview. "I think we still have two difficult years ahead of us," he added."

"I certainly do not exclude that we will cut back production even more," Mr. Enders said.

"Many airlines are struggling to raise cash to buy planes or fund installment payments as planes are being built. Carriers also are hoarding cash to prepare for the winter, when air traffic normally drops."

"If airlines struggle to fund purchases next year, Airbus and Boeing could lend customers money from their own coffers, as both plane makers have done in previous downturns. Mr. Enders said Airbus has "some leeway if it's necessary and reasonable" to underwrite more of its own sales. "But we're not going to stupidly pump as many aircraft as possible into the market by essentially buying our own products," he said."

Obviously, this will affect B as well. But again it goes back to the tough environment is going to effect how many new planes are built and delivered. I would go so far as to say this why A is postponing a next generation narrowbody to the mid 2020's - they simply need to preserve their resources and do incremental improvements rather than a clean sheet. Considering that B has the 787, 747-8, and the possibility of a 787-10 or NG777 all absorbing cash, a 737 can wait.

Article here: http://online.wsj.com/article/SB1253...957.html#mod=todays_us_marketplace


User currently offlineRyanair!!! From Australia, joined Mar 2002, 4755 posts, RR: 26
Reply 4, posted (4 years 11 months 2 weeks 2 days 3 hours ago) and read 2605 times:

In part, one of the reasons why Air Asia is deferring the A320 deliveries - according to an article in Air Transport World, is a lack of parking space back home in KUL. Their new Low Cost Terminal which was supposed to be build seems unlikely to be finished on time (or has construction even begun??).

[Edited 2009-10-05 17:10:39]

[Edited 2009-10-05 17:11:17]


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User currently offlineSQ772 From Singapore, joined Nov 2001, 1792 posts, RR: 5
Reply 5, posted (4 years 11 months 2 weeks 1 day 22 hours ago) and read 2449 times:



Quoting Ryanair!!! (Reply 4):
In part, one of the reasons why Air Asia is deferring the A320 deliveries - according to an article in Air Transport World, is a lack of parking space back home in KUL. Their new Low Cost Terminal which was supposed to be build seems unlikely to be finished on time (or has construction even begun??).

Seems like a convenient excuse to push to blame to the airport operator.



There's always a better way to fly...
User currently offlineRyanair!!! From Australia, joined Mar 2002, 4755 posts, RR: 26
Reply 6, posted (4 years 11 months 2 weeks 1 day 22 hours ago) and read 2438 times:



Quoting SQ772 (Reply 5):

Seems like a convenient excuse to push to blame to the airport operator.

My fence sitting is tipped towards Air Asia with this one. With a downturn, people normally flock towards LCCs (something which you have yet to do) and it is not surprising to see this airline buck the trend and expand, dumbfounding critics along the way.

And looking at how the airport operator concerned has been behaving towards Air Asia, there has to be some element of truth. The past pattern is evidence of their (airport operator) present disposition. And it is plain to see. Where the permanent low cost terminal is supposedly to have been completed in what.... 2012? Where are the piling works? Where are the foundation laying? Heck the demarcated piece of land for this terminal hasn't even been fenced off yet.



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