AviationAddict
Topic Author
Posts: 624
Joined: Sun Feb 05, 2006 2:37 am

What Happens To Planes On Order If Airline Closes?

Thu Mar 02, 2006 2:45 pm

Sorry about the misleading heading, I couldn't think of a better way to ask my question in such a small space, but anyways...

What happens to an aircraft manufacturer if an airline shuts down which had planes on order from said manufacturer? For example, if NW was to close, what would happen to Boeing and the 787s NW had on order? Would Boeing be compensated at all, or is it just tough luck? Now, that may not be the best example because I don't think NW has actually paid for the planes yet, but for the sake of argument let's just say they have!
 
ua777222
Posts: 2987
Joined: Mon Dec 22, 2003 11:23 am

RE: What Happens To Planes On Order If Airline Closes?

Thu Mar 02, 2006 5:00 pm

It is my understanding that prior to the closure of the airline all delivery slots currently assumed by the airline will try to be sold to add what profit it can to the struggling airline. I'm a little shy when it comes to the handling of the order after the airline closes it's doors but I'm sure it's the same concept. That the order slots will be sold to other airlines.

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Matt
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PanHAM
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Joined: Fri May 06, 2005 6:44 pm

RE: What Happens To Planes On Order If Airline Closes?

Thu Mar 02, 2006 6:56 pm

The deposits which the airline made will go to the manufacturer to cover for the costs they had. The manufacturer will have to find new clients for the airplanes which may be relatively easy on products like the 787.

Planes build already go "all white" into storage until a buyer is found.

[Edited 2006-03-02 10:57:33]
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Shenzhen
Posts: 1664
Joined: Wed Jun 25, 2003 12:11 pm

RE: What Happens To Planes On Order If Airline Closes?

Thu Mar 02, 2006 7:32 pm

Quoting UA777222 (Reply 1):
It is my understanding that prior to the closure of the airline all delivery slots currently assumed by the airline will try to be sold to add what profit it can to the struggling airline. I'm a little shy when it comes to the handling of the order after the airline closes it's doors but I'm sure it's the same concept. That the order slots will be sold to other airlines.

An airline only owns/controls an airplane after the money, in full, is transfered to the manufacturer (which happens at time of delivery). A contract between an airline and a manufacturer isn't transferable.