User avatar
PanAm_DC10
Crew
Topic Author
Posts: 3799
Joined: Wed Aug 23, 2000 7:37 am

First A350 Order Of 2006

Thu Jan 19, 2006 9:13 pm

This is from the subscription only newswire service of Dow Jones, fair use excerpt follows;

In an interview with Dow Jones Mr Leahy confirmed on Tuesday that they had closed a deal to sell an un-named Leasing Co 4 A350s in the previous week.

If anyone subscribes to the newswire the interview can be found here;

http://www.djnewswires.com/

It is not in the WSJ section as many may associate.

This got lost in all the talk generated by their Sales announcement that day and as they were talking 2005 orders, it was not included in the commitment numbers that they spoke of for the model.

Be interesting to see which Leasing Co it is when they update their January spreadsheet.

Regards, PanAm_DC10

[EDIT - For link]

[Edited 2006-01-19 13:16:37]
Ask the impossible to achieve the best possible
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: First A350 Order Of 2006

Thu Jan 19, 2006 9:19 pm

That's 43 leasing company orders if I am counting correctly, about a quarter of commitments and orders. Are there any indications on potential operators for these aircraft?
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: First A350 Order Of 2006

Thu Jan 19, 2006 10:30 pm

Quoting PanAm_DC10 (Thread starter):
Mr Leahy confirmed on Tuesday that they had closed a deal to sell an un-named Leasing Co 4 A350s in the previous week.

Leahy also mentioned this at the press conference 2 days ago. Together with the 172 previous announced orders and commitments and the 10 recently revealed orders for an unidentified customer, totals will reach 186. Any more news on these 10 unedentified orders? Has a time frame been given when these 10 and the other 4 will be identified?
SUPPORT THE LEBANESE CIVILIANS
 
KL808
Posts: 1534
Joined: Thu May 20, 1999 3:49 am

RE: First A350 Order Of 2006

Thu Jan 19, 2006 10:42 pm

Im speculating that the 10 UFO A350's are for SU.

Drew
AMS-LAX-MNL
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: First A350 Order Of 2006

Thu Jan 19, 2006 10:49 pm

Quoting Kl808 (Reply 3):
Im speculating that the 10 UFO A350's are for SU.

SU said any deal wouldn't be signed til March I thought. And I thought they were placing a larger order.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: First A350 Order Of 2006

Thu Jan 19, 2006 11:02 pm

Quoting Kl808 (Reply 3):
Im speculating that the 10 UFO A350's are for SU.

I think they wanted up to 28 planes. I'll give it a shot and say they're for Egyptair , to be announced together with the 7 A330's they plan to order.
SUPPORT THE LEBANESE CIVILIANS
 
User avatar
PM
Posts: 4834
Joined: Wed Feb 09, 2005 5:05 pm

RE: First A350 Order Of 2006

Thu Jan 19, 2006 11:10 pm

Quoting Manni (Reply 5):
I think they wanted up to 28 planes. I'll give it a shot and say they're for Egyptair , to be announced together with the 7 A330's they plan to order.

Maybe, but Aer Lingus seems more likely to me. Then again, who saw Bangkok Airways coming? And aren't Royal Jordanian looking at a 787/A350 order soon? Could be for anyone. (Well, not "anyone"; I think we can rule out Air Canada and Air India...!) But isn't that what makes this so enjoyable?!
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: First A350 Order Of 2006

Thu Jan 19, 2006 11:20 pm

Quoting PM (Reply 6):
And aren't Royal Jordanian looking at a 787/A350 order soon? Could be for anyone. (Well, not "anyone"; I think we can rule out Air Canada and Air India...!) But isn't that what makes this so enjoyable?!

An order from royal Jordanian is expected since a long time, also an order for Viva Macau has been in the air for a while, altough I can't remember how many aircraft would be involved. I believe Aer Lingus wanted more than 10 aircraft.
SUPPORT THE LEBANESE CIVILIANS
 
User avatar
PM
Posts: 4834
Joined: Wed Feb 09, 2005 5:05 pm

RE: First A350 Order Of 2006

Thu Jan 19, 2006 11:47 pm

Quoting Manni (Reply 7):
I believe Aer Lingus wanted more than 10 aircraft.

Really? To replace 7 A330s? Even allowing for growth, an initial order for 10 sounds about right.
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 12:20 am

Quoting PM (Reply 8):
Really? To replace 7 A330s? Even allowing for growth, an initial order for 10 sounds about right.

Yes, I do not have a credible source for this, but IIRC I've read it in one of the many posts discussing the upcoming A330 order. Then again, 10 does indeed sounds right if their current fleet counts only 7.
SUPPORT THE LEBANESE CIVILIANS
 
User avatar
shamrock350
Posts: 4657
Joined: Mon Mar 28, 2005 12:38 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 3:14 am

Aer Lingus are looking for over 10 aircraft I think it was somthing like 11-15.
 
FCKC
Posts: 1630
Joined: Sun Nov 21, 2004 9:39 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 5:30 am

I will put my money for the 10 ordered on Viva Macau.
They want around 12 frames , and said they will disclose their choice between A350 and 787 in January.
 
whitehatter
Posts: 5180
Joined: Sat Jun 12, 2004 6:52 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 9:23 am

Could be any one of a number of lessors. There are many second-line lease outfits who aren't as publicly known as GECAS or ILFC.

Major bank occasionally dip into the market via specially set up lease operating syndicates.
Lead me not into temptation, I can find my own way there...
 
User avatar
PanAm_DC10
Crew
Topic Author
Posts: 3799
Joined: Wed Aug 23, 2000 7:37 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 7:16 pm

Quoting Manni (Reply 2):
Quoting PanAm_DC10 (Thread starter):
Mr Leahy confirmed on Tuesday that they had closed a deal to sell an un-named Leasing Co 4 A350s in the previous week.


Leahy also mentioned this at the press conference 2 days ago. Together with the 172 previous announced orders and commitments and the 10 recently revealed orders for an unidentified customer, totals will reach 186. Any more news on these 10 unedentified orders? Has a time frame been given when these 10 and the other 4 will be identified?

Hi Manni

Indeed he did mention it though no-one seemed to have picked up on the fact that this is their first order for the year.

As for the 10 undisclosed, they are either for GECAS or Air Europa, one of which has "firmed" their order. Mr Leahy has confirmed that total orders and commitments are 176. If the 10 undisclosed increased that number to 186 then Mr Leahy and Mr Humbert would have said so, but they both maintain the 172 or 176 total which, to me, means the 10 undisclosed is as I previously stated, an announced commitment which has been firmed.

Regards, PanAm_DC10
Ask the impossible to achieve the best possible
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 7:34 pm

I have to give Leahy/Airbus a lot of credit, they've got virtually everyone repeating their new contrived jargon: "orders and commitments." Formerly, everyone spoke of "orders and options." At least an option is a binding contract with defined terms and consideration exchanged. What exactly qualifies as a commitment in the order intake context; a press release, a LOI, a MOU (all preliminary to a contract, none of which are legally binding)? BTW, how long does a commitment last before it expires?

[Edited 2006-01-20 11:43:19]
Lex Ancilla Justitiae
 
User avatar
PanAm_DC10
Crew
Topic Author
Posts: 3799
Joined: Wed Aug 23, 2000 7:37 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 8:03 pm

Quoting Leelaw (Reply 15):
BTW, how long does a commitment last before it expires?

You posted this in another thread to which I responded though I missed the last part of your question.

How long does a commitment last before it expires? Well, if you look at Virgin America, they first announced their LoI or MoU in 2004 so it lasted over a year. Air Europa first announced their LoI for the A350 in December 2004 and they may well be the undisclosed order a year later, though we're not sure yet.

It all depends on the clauses and wording of the initial LoI or MoU in which there can be many variables. Then again, I guess one to follow as a good example is Primaris, or even better, the GECAS LoI for 8 x 772LR signed in 2000. I highly doubt that one still exists in it's initial form.

Regards, PanAm_DC10
Ask the impossible to achieve the best possible
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 8:17 pm

Quoting PanAm_DC10 (Reply 16):
You posted this in another thread to which I responded though I missed the last part of your question.

That's because I modified my "mini-rant" slightly when I repeated it in this thread as it seemed relevant to the topic.

Thanx for caring. Order nerds of the world, unite!  Smile
Lex Ancilla Justitiae
 
User avatar
scbriml
Posts: 13375
Joined: Wed Jul 02, 2003 10:37 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 8:30 pm

Quoting Leelaw (Reply 15):
I have to give Leahy/Airbus a lot of credit, they've got virtually everyone repeating their new contrived jargon: "orders and commitments." Formerly, everyone spoke of "orders and options."

As far as I'm aware, Boeing has been talking about "orders and commitments" ever since the 787 was launched. Whenever Baseler talks about 787 sales, does he talk about the lower firm order number, or the higher "orders and commitments" number?

Here the first example I could find from his very own blog (talking about the QF order)

Quote:
The Qantas order takes the total now to 26 customers who have ordered and committed to the 787 program. A total of 354 orders and commitments for airplanes so far.

So Baseler does exactly the same as Leahy - what do you expect, they're both salesman "bigging-up" their company's products. Not a big surprise really. I don't know who started it first, but both companies do it.

In my book, the only thing that counts is firm orders in the book at the end of the year. twocents 
Time flies like an arrow. Fruit flies like a banana!
 
User avatar
glideslope
Posts: 1423
Joined: Sun May 30, 2004 8:06 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 8:35 pm

Interesting. Another leasing company. When will operators become interested in the 350?
To know your Enemy, you must become your Enemy.” Sun Tzu
 
User avatar
scbriml
Posts: 13375
Joined: Wed Jul 02, 2003 10:37 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 8:41 pm

Quoting Glideslope (Reply 19):
Interesting. Another leasing company. When will operators become interested in the 350?

Do you think the leasing companies are buying planes without customers?  

ILFC and GECAS alone have ordered over 800 planes (from Airbus), so I suspect Airbus are quite happy for the leasing companies to buy their planes.  

[edited for clarification]

[Edited 2006-01-20 13:03:44]
Time flies like an arrow. Fruit flies like a banana!
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 8:49 pm

Quoting Glideslope (Reply 19):
Interesting. Another leasing company. When will operators become interested in the 350?

Here's a bit of homework for you. Go, look up how many A330 are owned by leasing companys. Afterwards try to find out how many have been placed by customers and wich customers. Do the same again for the 777 or A340. This should give you a good idea, why leasing companys buy aircraft.
SUPPORT THE LEBANESE CIVILIANS
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 9:03 pm

Steve,

I stand corrected, and will now credit Baseler (architect)/Leahy (chief enabler) with foisting the "orders and commitments" contrivance upon the order intake purists.  Smile

End of Rant.
Lex Ancilla Justitiae
 
sabenapilot
Posts: 2442
Joined: Sat Feb 26, 2000 6:18 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 9:06 pm

Quoting Glideslope (Reply 19):
Interesting. Another leasing company. When will operators become interested in the A350?

Indeed, yet another company who's daily business it is to carefully analyze, forecast and anticipate the global needs of a wide spread of airlines with very diverse needs, based on many financial, technical and operational studies and open discussions with small and medium sized airlines all over the world.

Its clear the idea living amongst leasing companies is that the A350 is going to be a very good and economical plane, which will be in high demand by many airlines in a few years, or they would not risk their money on it so massively!

Seeing AIRLINES select a specific plane might be very ego-boosting, but in the end it is just the result of an evaluation process by ONE airline, based on ONE set of needs, integrated in ONE existing fleet and for use on ONE network. Leasing companies have to look much wider than that and select a plane suitable for as many as possible, rather than ideal for one!

It is striking to see leasing companies have been extremely reluctant to sign for the 787 and in fact still are.
In fact, I think the 787 is Boeing's slowest selling jet with leasing companies ever!

Blue chips customers may be very interesting to have from a promotional point of view, but having the leasing companies on board is more reassuring from an operating point of view.

[Edited 2006-01-20 13:30:36]
 
User avatar
scbriml
Posts: 13375
Joined: Wed Jul 02, 2003 10:37 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 9:07 pm

Quoting Leelaw (Reply 22):
Steve,

I stand corrected, and will now credit Baseler (architect)/Leahy (chief enabler) with foisting the "orders and commitments" contrivance upon the order intake purists.

No problem - I couldn't let Airbus take all the credit! smile 
Time flies like an arrow. Fruit flies like a banana!
 
User avatar
PanAm_DC10
Crew
Topic Author
Posts: 3799
Joined: Wed Aug 23, 2000 7:37 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 9:55 pm

Quoting Sabenapilot (Reply 23):
It is striking to see leasing companies have been extremely reluctant to sign for the 787 and in fact still are.
In fact, I think the 787 is Boeing's slowest selling jet with leasing companies ever!

Sabenapilot

Respectfully, I shall disagree a little with that part of your statement. The A350 has 43 commitments from Leasing Companies whilst the B787 has 38, included in that is 4 options for ILFC. So in total there is only about a 5 frame difference at this point. Now I cannot provide a link but I have information that Boeing with-held from placing early delivery 787s with Leasing Co's in favour of direct sales to Airlines.

Also, in the case of both aircraft, the largest Leasing Companies were reluctant to sign up initially because the design of certain models was not, at that point, sufficient to meet their criteria. That's why ILFCs first deliveries of the 787 are not until 2010.

That said, I do not refute that the A350 has more Leasing Companies which have commited to or ordered it at this point over the 787. But one order from GECAS and maybe AWAS could change that.

Quoting Sabenapilot (Reply 23):
Blue chips customers may be very interesting to have from a marketing point of view, but having the leasing companies on board is more reassuring from an operating point of view.

What if you get both at the same time? I've no doubt that given the financing solutions which Airbus and Boeing include in their tenders to RFPs that on occassion the two shall meet. For example;

Qantas will fund the new aircraft from cash flows. However the company did not specify how many of the new planes would be leased and how many would be purchased, saying that too was commercially sensitive information

Source: QF CEO Geoff Dixon SMH 15 December 2005

So the order may well be direct from the manufacturer however the airline maybe using a Leasing Co to finance the aquisition. Over time this should bring on board more Leasing Co's to both the 787 and A350.

The flip side of course is that with delivery in some cases quite some time away, that some Leasing Co's may not place their ordered frames and convert to different models. Such as instances in the past with CIT and the 753 which they never took delivery of in addition to ILFC and the 764 IIRC.

Regards, PanAm_DC10
Ask the impossible to achieve the best possible
 
sabenapilot
Posts: 2442
Joined: Sat Feb 26, 2000 6:18 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 10:15 pm

Quoting PanAm_DC10 (Reply 24):
Respectfully, I shall disagree a little with that part of your statement. The A350 has 43 commitments from Leasing Companies whilst the B787 has 38, included in that is 4 options for ILFC.

Indeed, in absolute numbers there is only a small difference, but relative to the total number of sales of both planes, the 787 clearly has gained less orders from leasing firms.

Why this is, can be discussed (technological risks which lead them to believe the 787 will not be as easy to outplace with smaller airlines, or indeed B simply keeping delivery slots open for airlines itself), but it remains stunning to see the 787 picking up orders from leasing firms so slowly and so modestly.


Quoting PanAm_DC10 (Reply 24):
That said, I do not refute that the A350 has more Leasing Companies which have committed to or ordered it at this point over the 787.

Indeed, that's yet another factor which I didn't even take into account, mainly because I expect leasing firms to step on board of a new plane relatively soon after it is launched anyway, so I do not think it is very important whether it is offered for 1 or 2 years already to draw the comparison....
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 10:21 pm

Quoting Sabenapilot (Reply 22):
In fact, I think the 787 is Boeing's slowest selling jet with leasing companies ever!

Interesting. How did you come to that conclusion? Based on your other observations, you must find it equally striking that the after more than five years on the market, the A380 has garnered only one order from a lessor (ILFC for 10 aircraft)?

Leasing companies don't have a very long history of being major players in the new-build market. IIRC, they didn't become a major factor in the marketplace until the mid to late eighties. My understanding is lessors place orders for aircraft based primarily on lessee requirements and interest in particular aircraft, it's more of a bottom/up, rather than a top/down selection process.

[Edited 2006-01-20 14:39:13]
Lex Ancilla Justitiae
 
User avatar
PanAm_DC10
Crew
Topic Author
Posts: 3799
Joined: Wed Aug 23, 2000 7:37 am

RE: First A350 Order Of 2006

Fri Jan 20, 2006 11:05 pm

Quoting Sabenapilot (Reply 25):
(technological risks which lead them to believe the 787 will not be as easy to outplace with smaller airlines

As to the technological risks, Mr Udvar-Hazy from ILFC specifically stated this was one of the reasons why his company was not ready to order the 787 in 2004, in addition, he also wanted the A350 to be more defined before ordering.

I believe you may agree that both the A350 and the B787 have been sold well to small airlines and not in large numbers either as the order book's build. Which leads to;

Quoting Sabenapilot (Reply 25):
or indeed B simply keeping delivery slots open for airlines itself

Which is what Boeing appear to have done, thereby gaining a greater number of direct owner / operators which will take delivery and hold onto what they have bought. If this is the case, then residual values should remain underpinned if the airplane meets it's performance specifications, in turn, this only enhances the appeal to Leasing Companies as they can be assured of a better return over time.

Quoting Sabenapilot (Reply 25):
but it remains stunning to see the 787 picking up orders from leasing firms so slowly and so modestly.

Again, with respect, stunning is not the word I would use. You can see why from what I have posted thus far. However, with such a broad range of carriers having ordered the 787, including many "blue chip" carriers, I believe that we will see a pick up in the diversity of Leasing Co's which commit to the model over the next year or two given the distribution that Boeing have been able to secure. As the A350 program continues to grow the same could be said for that model too.

Quoting Sabenapilot (Reply 25):
so I do not think it is very important whether it is offered for 1 or 2 years already to draw the comparison....

That is a fair point and we won't know the answer for some time yet, though in my opinion, Boeing may well have been quite astute to push for direct distribution to carriers because if residual values hold that only enhances the appeal to Leasing Co's which may well lead to some substantial orders in the North American market once it fully recovers.

Regards, PanAm_DC10
Ask the impossible to achieve the best possible
 
sabenapilot
Posts: 2442
Joined: Sat Feb 26, 2000 6:18 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 11:28 pm

Quoting Leelaw (Reply 26):
My understanding is lessors place orders for aircraft based primarily on lessee requirements and interest in particular aircraft.

I think they do more than that actually!

Obviously, lessors often order on behalf of a specific airline and thus simply pre-finance the order as such, which is indeed the bottom->up selection process of a plane if you will.

However, lessors do more than just pre-finance done deals; they undoubtedly also place not-allocated orders themselves: top->down orders if you will.

Where the first kind of orders do not pose too much risk to the lessor, the second type of orders is much more tricky for them (but so it their margin of course), as they order a plane for which they do not have an immediate user. Needless to say they will very well evaluate the plane first and go ahead only if they are 100% sure there will be enough demand for the plane with the kind of airlines that lease planes which haven't specifically been ordered for them. Lessors will thus prefer conventional all rounders, suitable to all needs, rather than particularly long range, high capacity or speedy or technologically advanced planes to reduce their risk as much as possible! I think the reason leasing firms are reluctant to order the 787 in bigger numbers than they have done so far is because of the ongoing maintenance issues with the fuselage and their justified fear that smaller airlines (which are the main lessees for top->bottom orders) will not be able or not be willing to cope with the whole composite thing and simply go for the more conventional A350. On could say that this plays in the hand of B because it leaves slots for airlines to order the plane directly from them (and as owners hold on to planes longer than lessees, underpin the resale value of the 787), but I think this is more a side effect than a planned strategy of them. I can't imagine B would have held off an order for let's say 50 787s by a lessor in December last year... ("200 mark")

Quoting Leelaw (Reply 26):
Based on your observations, you must find it equally striking that the after more than five years on the market, the A380 has garnered only one order from a lessor (ILFC for 10 aircraft)?

Not at all! Since the A380 can hardly be dubbed an 'all rounder', it is very unlikely any lessor would put in a top->bottom order for such a big plane at present. The A380 is at the top of the market, so all orders are made by customers that know what to do with it. (I suppose ILFC has a pretty good idea what to do with the 8 remaining A380s they have on order)

Quoting Leelaw (Reply 26):
Leasing companies don't have a very long history of being major players in the new-build market. IIRC, they didn't become a major factor in the marketplace until the mid to late eighties.

Which is 20 years ago! Do you know how many orders from lessors the 777 gained after almost 2 years? And the 777 is a much bigger plane, so the 787 should easily sell more! And also: the market was much smaller back then than it is now!

I know Boeing hasn't been doing much except for the 777 during that time span, but Airbus certainly has and it remains striking to see the 787 -a plane very much in the middle of the market spectrum- is so reluctantly ordered by leasing firms....

[Edited 2006-01-20 15:35:44]
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Fri Jan 20, 2006 11:48 pm

Quoting Sabenapilot (Reply 28):
Do you know how many orders from lessors the 777 gained after almost 2 years? And the 777 is a much bigger plane, so the 787 should easily sell more! And also: the market was much smaller back then than it is now!

Yes.

772

1st Order: UAL 15-October-90 (16)
1st Order from a Leasing Company: ILFC 15-December-92 (4)
2nd Order from a Leasing Company: SAL 22-December-95 (1)

787

1st Order: ANA 26-July-04 (50)
1st Order from a Leasing Company: ILFC 7-October-05 (20)

Seems by way of comparison to the 777, the 787 is doing OK?

[Edited 2006-01-20 15:49:55]

[Edited 2006-01-20 16:15:40]
Lex Ancilla Justitiae
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: First A350 Order Of 2006

Sat Jan 21, 2006 12:00 am

Quoting Sabenapilot (Reply 28):
Which is 20 years ago! Do you know how many orders from lessors the 777 gained after almost 2 years? And the 777 is a much bigger plane, so the 787 should easily sell more! And also: the market was much smaller back then than it is now!

I know Boeing hasn't been doing much except for the 777 during that time span, but Airbus certainly has and it remains striking to see the 787 -a plane very much in the middle of the market spectrum- is so reluctantly ordered by leasing firms....

The 777 is a plane that was considered by airlines to be expensive to buy and own directly, so taking planes from leasing companies was considered a better option by airlines in some cases. That said, looking at firm orders booked so far, both the 777 and 787 have similar fraction of airplanes ordered by leasing companies, 12% and 11% respectively. Of course airlines are free to arrange leasing agreements for aircraft they ordered directly as well, so not all the numbers of leased aircraft will show up on the Boeing site.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
sabenapilot
Posts: 2442
Joined: Sat Feb 26, 2000 6:18 pm

RE: First A350 Order Of 2006

Sat Jan 21, 2006 12:17 am

Quoting Leelaw (Reply 29):

...

Of course, you conveniently take only the 777-200 whereas you pick the entire 787 range....
Can you add the numbers for the different 777-300 products too in their first years after being offered???

And as you have said yourself, leasing firms have become MUCH more important than they were 10 to 20 years ago, so we should see much bigger numbers for the 787....

Quoting Atmx2000 (Reply 30):
That said, looking at firm orders booked so far, both the 777 and 787 have similar fraction of airplanes ordered by leasing companies, 12% and 11% respectively.

Yet, the 787 is a much more mainstream oriented plane than the 777 (how many charter airlines in Europe fly the 777? and how many have 767/A330s?). Charter airlines are known to be top customers for lessors, so the 787 should have a much higher share of lessors in its customer list.

Mr. Abulafia is selling this as 'an advantage' for the 787 'as having blue chip customers only', but in fact, it is not so clear if this really is such an advantage at all, or just a hint at the lack of confidence there is amongst the leasing firms in the 787.
 
N79969
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

RE: First A350 Order Of 2006

Sat Jan 21, 2006 12:29 am

Quoting Sabenapilot (Reply 25):
Why this is, can be discussed (technological risks which lead them to believe the 787 will not be as easy to outplace with smaller airlines, or indeed B simply keeping delivery slots open for airlines itself), but it remains stunning to see the 787 picking up orders from leasing firms so slowly and so modestly.



Quoting Sabenapilot (Reply 28):
-a plane very much in the middle of the market spectrum- is so reluctantly ordered by leasing firms....

It is hard to understand what is supposedly "stunning" and the point of these remarks.

My understanding that is preferable to sell directly to operators rather than lessors anyway. The relatively low proportion sold to lessors is probably a good thing in that regard. That an airline is willing to buy outright rather than lease an airplane indicates that they have confidence in the asset values on the balance sheet.

There are various, complex reasons to lease aircraft. But one big reason to lease is to avoid the risks of acquistion and the ability to return the aircraft on short notice without incurring capital losses.

As far as blue chip lessors go, ILFC has ordered more B787 than A350. The Kuwaiti company that ordered A350 apparently is a new firm and had no customers lined up to take the aircraft. That may still be the case.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: First A350 Order Of 2006

Sat Jan 21, 2006 12:34 am

Quoting Sabenapilot (Reply 31):
Of course, you conveniently take only the 777-200 whereas you pick the entire 787 range....

He did that because the 772A and ER models were the only ones offered early in the programs life. The 777-300A wasn't launched until 1995 and the -200LR and -300ER weren't launched until 2000. Leasing company orders for the 773ER were much higher as GECAS and IFLC had ordered 28 total, and there weren't that many direct orders from airlines due to financial strife. I would suggest the higher fraction of leasing company orders wasn't a good sign.


Quoting Sabenapilot (Reply 31):
Yet, the 787 is a much more mainstream oriented plane than the 777 (how many charter airlines in Europe fly the 777? and how many have 767/A330s?). Charter airlines are known to be top customers for lessors, so the 787 should have a much higher share of lessors in its customer list.

Maybe because the 787 is a cheaper plane to own than the 777 is. The acquisition price is low relatively speaking for the capability.

And airlines can arrange their own lease arrangements.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Sat Jan 21, 2006 1:03 am

Quoting Atmx2000 (Reply 33):
And airlines can arrange their own lease arrangements.

Sabenapilot may find it "striking" how many 787 operators will be able to easily arrange sale/leaseback transactions under competitive terms, immediately after taking delivery of aircraft ordered directly from Boeing.
Lex Ancilla Justitiae
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: First A350 Order Of 2006

Sat Jan 21, 2006 1:14 am

Quoting Atmx2000 (Reply 33):
Leasing company orders for the 773ER were much higher as GECAS and IFLC had ordered 28 total, and there weren't that many direct orders from airlines due to financial strife. I would suggest the higher fraction of leasing company orders wasn't a good sign

Anyone want to venture a guess on how many of those aircraft were "whitetails" ordered by the leasing companies on spec. as suggested earlier by our friend from Belgium?
Lex Ancilla Justitiae
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: First A350 Order Of 2006

Sat Jan 21, 2006 3:55 am

Quoting Leelaw (Reply 35):
Anyone want to venture a guess on how many of those aircraft were "whitetails" ordered by the leasing companies on spec. as suggested earlier by our friend from Belgium?

The GECAS order was probably related to the GEAE investment in the 777LR engine program.

Also, Emirates initial 773ER acquisition in 2004 involved taking aircraft from leasing companies who had early slots, in addition to 4 direct 773ER purchases. I don't know if it was IFLC, GECAS or both who provided the aircraft.

[Edited 2006-01-20 20:12:13]

[Edited 2006-01-20 20:12:40]
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
dalecary
Posts: 834
Joined: Tue Jan 18, 2000 10:28 am

RE: First A350 Order Of 2006

Sat Jan 21, 2006 6:30 am

Quoting Sabenapilot (Reply 22):
It is striking to see leasing companies have been extremely reluctant to sign for the 787 and in fact still are.
In fact, I think the 787 is Boeing's slowest selling jet with leasing companies ever!

Boeing had so much demand from airlines for the 787 that they didn't need the leasing companies. I would take it that the fast selling WB of all time is doing very well with the airlines, and Boeing aren't being dictated to by the leasing companies. Good try at negative spin but you are way off beam. In fact, the A350s greater reliance on leasing companies can easily be deemed a negative in comparison with the 787. Leasing companies have a habit of changing/cancelling orders/commitments, partly due to their large portfolios and needs to satisfy their many customers(the airlines).
I think you would find that the industry would regard a lesser reliance on leasing companies to be an advantage(in general).
 
User avatar
Stitch
Posts: 23088
Joined: Wed Jul 06, 2005 4:26 am

RE: First A350 Order Of 2006

Sat Jan 21, 2006 8:26 am

Quoting Dalecary (Reply 37):
Boeing had so much demand from airlines for the 787 that they didn't need the leasing companies.

"Don't need" is probably too strong a word, but indeed one can interpret this a number of ways, positive and negative.

If you wanted a negative view on the A350's success with lessors, you could argue that airlines are leasing A350s because they don't trust it will meet it's targets, and want to be able to "get out" if necessary. In such a case, it would be "stunning" to note how many operators are not ordering the A350, but instead leasing.  Wink

And a positive view on the 787s failure with lessors could be argued that airlines are buying 787s because they do trust it will meet it's targets, and therefore are willing to risk capital. In such a case, it would be "stunning" to note how many operators are ordering the 787 and not leasing.  Wink

Who is online