A220: AtlasGlobal cancels LOI & BRA Braathens seeks indefinite delay

mercure1 · Wed Sep 05, 2018 4:59 pm

News out today that Turkish carrier AtlasGlobal has decided not to take up its LOI for 15 A220-300 aircraft, instead opting to stick with Airbus fleet including acquiring additional 3 frames for delivery starting in 2019.

Additionally, Swedish BRA Braathens (former Malmö Aviation) says its negotiating indefinite delay on its order for 10 A220-100 due to softer market demand and changes in Swedish tax regime. BRA previously twice had restructured and delayed its aircraft order book

https://newsroom.aviator.aero/atlasglob ... 220-order/
https://centreforaviation.com/news/bra- ... 20s-836851

janders · Wed Sep 05, 2018 5:08 pm

The A220 order book has long been full of these questionable orders.

Others that are certainly in doubt are Iraq, GulfAir, Odyssey, Privatair, Republic, Ilyushin, Redwings, Porter, etc..

I suspect Airbus will seek to clean the order book up and get clarity one way or the other about who is doing what.

lightsaber · Wed Sep 05, 2018 5:11 pm

A LOI isn't worth the paper it is written on.

Braathans is struggling. Thankfully JetBlue and Moxie are in the pipeline. I predict at least one more order in 2018.

LAXintl · Wed Sep 05, 2018 5:13 pm

Never quite understood why Bombardier hung on to so many questionable orders, especially LOIs.
For example, the AtlasGlobal one dates back to 2011. Its been pretty obvious from the silence, they were not going to take the type, and instead are focusing on A320-321-330 family instead.

BAeRJ100 · Wed Sep 05, 2018 5:13 pm

janders wrote:
The A220 order book has long been full of these questionable orders.

Others that are certainly in doubt are Iraq, GulfAir, Odyssey, Privatair, Republic, Ilyushin, Redwings, Porter, etc..

The GulfAir CEO said a couple months back that their A220 order had been cancelled.

SteelChair · Wed Sep 05, 2018 5:32 pm

More delivery slots available for real airlines

keesje · Wed Sep 05, 2018 5:47 pm

Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Polot · Wed Sep 05, 2018 5:47 pm

SteelChair wrote:
More delivery slots available for real airlines

Half these airlines probably never had delivery slots assigned/secured in the first place, especially in regards to the LOIs.

Airbus and Boeing would have let a 7+ year old LOI expire years ago, BBD only kept them around because they were desperate for any order for the C series and did not want the bad publicity of airlines canceling orders/commitments.

UPlog · Wed Sep 05, 2018 5:48 pm

Much of the C-series order book was indeed certainly made up of the dregs of the industry, with a high likelihood of never materializing.

Erebus · Wed Sep 05, 2018 5:50 pm

keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

What does the loss of an A220 LOI have to do with the A380?

Dominion301 · Wed Sep 05, 2018 5:54 pm

keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Airbus would have known full well that 1/2 the CSeries order book was made up of fluff. AC, DL, B6, Swiss, Air Baltic (and even Moxie), those are the real orders. The Porter LOI can still be considered just that as PD have still laid down their deposits. Hopefully one day Porter decide to commit to the A220, YTZ runway extension or otherwise.

VS4ever · Wed Sep 05, 2018 5:59 pm

Polot wrote:
SteelChair wrote:
More delivery slots available for real airlines

Half these airlines probably never had delivery slots assigned/secured in the first place, especially in regards to the LOIs.

Airbus and Boeing would have let a 7+ year old LOI expire years ago, BBD only kept them around because they were desperate for any order for the C series and did not want the bad publicity of airlines canceling orders/commitments.

^----^ this, if you are looking to exit a business, the last thing you want to do is have a bunch of cancellations show up, just before you sell or transfer. Whether these were truly valid or not, who knows. but BBD would have wanted to show during the due diligence that they had a big order book to come. Now whether Airbus saw through that, not clear, but their M&A auditors would have done a thorough investigation of the book before airbus finally agreed to take it on. I think clean up is about right, they were strong enough at the time to pass base muster in review, but ultimately when push came to shove, they weren't going to be taken. Much easier ultimately for Airbus to have the orders cancelled/deferred post acquisition than BBD prior to, when it would have looked like a massive gaping hole. Now that B6 and Moxie have signed up, this is a lot less of a blow to the program than it would have been to be honest.

OA940 · Wed Sep 05, 2018 6:08 pm

janders wrote:
The A220 order book has long been full of these questionable orders.

Others that are certainly in doubt are Iraq, GulfAir, Odyssey, Privatair, Republic, Ilyushin, Redwings, Porter, etc..

I suspect Airbus will seek to clean the order book up and get clarity one way or the other about who is doing what.

I don't see why Red Wings is in doubt. It's a firm order IIRC and they already have delivery dates announced.

Anyway back to the subject, this may encourage other airlines to order the type. It has so much potential especially now with Airbus behind the wheel. If they market it right they could get their hands on many more. All they need to do is get the production line running smoothly.

william · Wed Sep 05, 2018 6:12 pm

keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Bricktop · Wed Sep 05, 2018 6:24 pm

william wrote:
keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Someone hacked keesje? Or a failed attack at humor possibly.

workhorse · Wed Sep 05, 2018 6:33 pm

keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Who are you and what have you done to our beloved Keesje?

fabian9 · Wed Sep 05, 2018 6:37 pm

/sarcasm

c933103 · Wed Sep 05, 2018 7:01 pm

mercure1 wrote:
[…]decided not to take up its LOI for 15 A220-300 aircraft, instead opting to stick with Airbus fleet including[…]

This is actually a rather strange statement.

SteelChair · Wed Sep 05, 2018 7:55 pm

This seems like good news to me. The order book is slowly being cleansed of non-players, and more stable airlines are being added. This will be good for the A220 program. I'd still love to see another major step up.......UA/AA/AFKLM/IAG to name just a few. I think it would be a great airplane for QF.

Revelation · Wed Sep 05, 2018 8:28 pm

keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Welcome to the dark side, K-man! :biggrin:

keesje · Wed Sep 05, 2018 8:57 pm

MIflyer12 · Wed Sep 05, 2018 11:59 pm

Dominion301 wrote:
keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Airbus would have known full well that 1/2 the CSeries order book was made up of fluff. AC, DL, B6, Swiss, Air Baltic (and even Moxie), those are the real orders. The Porter LOI can still be considered just that as PD have still laid down their deposits. Hopefully one day Porter decide to commit to the A220, YTZ runway extension or otherwise.

Airbus and BBD agreed that 50.01% of the program and backlog was worth CDN$0. Junk like this in the 'backlog' was one reason why.

aemoreira1981 · Thu Sep 06, 2018 12:08 am

I wonder if the stretched A220-300 might be offered to Delta as well as a shrink to JetBlue.

wrongwayup · Thu Sep 06, 2018 12:11 am

aemoreira1981 wrote:
I wonder if the stretched A220-300 might be offered to Delta as well as a shrink to JetBlue.

I'd be surprised if Delta didn't take 300s at some point.

B757Forever · Thu Sep 06, 2018 12:16 am

aemoreira1981 wrote:
I wonder if the stretched A220-300 might be offered to Delta as well as a shrink to JetBlue.

The original agreement allowed DL to opt to the -300 after delivery #35. I expect DL will fulfill its commitment to purchase a minimum number of -100 and will move to take the remainder of the order in -300 aircraft. We'll see how this plays out.

lightsaber · Thu Sep 06, 2018 12:31 am

keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Whoa K-man.

Do we need to look into your account security, or is the Lithium dosage finally dialed in? :duck:

Seriously, I want a real backlog for the A220. And with CFM, Pratt, and RR all having supply issues, the industry is wonkey this year.

Lightsaber

sunking737 · Thu Sep 06, 2018 12:48 am

Why do folks keep talking about Republic.?? I thought that order was long since cancelled in Chap 11??

SteelChair · Thu Sep 06, 2018 1:06 am

MIflyer12 wrote:
Dominion301 wrote:
keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Airbus would have known full well that 1/2 the CSeries order book was made up of fluff. AC, DL, B6, Swiss, Air Baltic (and even Moxie), those are the real orders. The Porter LOI can still be considered just that as PD have still laid down their deposits. Hopefully one day Porter decide to commit to the A220, YTZ runway extension or otherwise.

Airbus and BBD agreed that 50.01% of the program and backlog was worth CDN$0. Junk like this in the 'backlog' was one reason why.

Well thats ancient history now. The fact is that they DID acquire it and the order book IS being cleaned up. And thats good for the program, and for progress.

Polot · Thu Sep 06, 2018 1:08 am

sunking737 wrote:
Why do folks keep talking about Republic.?? I thought that order was long since cancelled in Chap 11??

Nope, it is still on the books. Not that anyone expects Republic to take the plane.

Erebus · Thu Sep 06, 2018 1:23 am

Won't the manufacturer be liable for penalties if they terminated those questionable contracts as the other party continues to perform their obligations?

wrongwayup · Thu Sep 06, 2018 1:33 am

Erebus wrote:
Won't the manufacturer be liable for penalties if they terminated those questionable contracts as the other party continues to perform their obligations?

Yes, but as you say that assumes the other party continues to perform their obligations, which include, not insignificantly, the requirement to pay PDPs.

juliuswong · Thu Sep 06, 2018 3:21 am

Current A220 Family Orders:
Falcon Aviation Services- 2 A220-300
Tanzanian Government Flight Agency (for Air Tanzania)- 2 A220-300
Iraqi Airways- 5 A220-100
PrivatAir- 5 A220-300
GTLK State Transport Leasing Co. (for Red Wings Airlines)- 6 A220-300
Braathens Aviation- 10 A220-300
Gulf Air- 10 A220-100
Korean Air- 10 A220-300
Odyssey Airlines-10 A220-100
EgyptAir (for EgyptAir Express)- 12 A220-300
Ilyushin Finance Co.- 14 A220-300
Al Qahtani Aviation Company (for SaudiGulf)- 16 A220-300
Lease Corporation International- 3 A220-100 and 17 A220-300
Lufthansa Group (for Swiss)-10 A220-300 and 20 A220-300
Macquarie AirFinance- 40 A220-300
Republic Airways- 40 A220-300
Air Canada- 45 A220-300
airBaltic- 50 A220-300
Delta Air Lines- 75 A220-100

Current A220 Delivery Status:
Korean Air- 7 A220-300
airBaltic- 11 A220-300
Lufthansa Group- 24 (8 A220-100 and 16 A220-300)

juliuswong · Thu Sep 06, 2018 3:41 am

Current MoU, LoI, Conditional Order, Unknown status:
Air Arabia Jordan- 2 A220-100
CDB Leasing Co.- 5 A220-100 and 10 A220-300
Future U.S. airline- 60 A220-300
JetBlue- 60 A220-300
Porter Airlines- 30 A220-100
Undisclosed African airline- 5 undetermined
Undisclosed existing customer- 13 undetermined
Zhejiang Loong Airlines Co.- 20 A220-100

Slug71 · Thu Sep 06, 2018 4:06 am

Airbus probably never expected these to materialize anyway. Just LOIs anyway.
JetBlue will firm. And probably exercise the options.

LaunchDetected · Thu Sep 06, 2018 6:45 am

BAeRJ100 wrote:
janders wrote:
The A220 order book has long been full of these questionable orders.

Others that are certainly in doubt are Iraq, GulfAir, Odyssey, Privatair, Republic, Ilyushin, Redwings, Porter, etc..

The GulfAir CEO said a couple months back that their A220 order had been cancelled.

The GulfAir CEO said that the order was "certainly not cancelled".

https://www.belfasttelegraph.co.uk/busi ... 36050.html

Interesting point: "The comments have fuelled speculation that the carrier may be seeking to negotiate better terms with Airbus. It follows an assessment last week by credit rater Moody's that JetBlue enjoyed a significant discount on its order for A220-300s."

ODwyerPW · Thu Sep 06, 2018 7:35 am

LaunchDetected wrote:
The GulfAir CEO said that the order was "certainly not cancelled".

https://www.belfasttelegraph.co.uk/busi ... 36050.html

Interesting point: "The comments have fuelled speculation that the carrier may be seeking to negotiate better terms with Airbus. It follows an assessment last week by credit rater Moody's that JetBlue enjoyed a significant discount on its order for A220-300s."

GulfAir ordered 10 of the smaller model... JetBlue is ordering 60 of the bigger model. Of course they recieved a significant discount.....

oldannyboy · Thu Sep 06, 2018 8:27 am

Airbus bought a great aircraft programme for nothing. They never cared about these *froth* orders anyway. The A220 is doing just fine.

keesje · Thu Sep 06, 2018 9:17 am

oldannyboy wrote:
Airbus bought a great aircraft programme for nothing. They never cared about these *froth* orders anyway. The A220 is doing just fine.

For nothing? How much money do you think they are pumping in?

Setting up the extra assembly line & re organizing the supply alone will costs them at least a billion before anything leaves the line..

https://leehamnews.com/2018/07/11/future-mobile-a220-final-assembly-line-already-pushing-capacity/

oldannyboy · Thu Sep 06, 2018 10:04 am

keesje wrote:
oldannyboy wrote:
Airbus bought a great aircraft programme for nothing. They never cared about these *froth* orders anyway. The A220 is doing just fine.

For nothing? How much money do you think they are pumping in?

Setting up the extra assembly line & re organizing the supply alone will costs them at least a billion before anything leaves the line..

https://leehamnews.com/2018/07/11/future-mobile-a220-final-assembly-line-already-pushing-capacity/

Of course, I agree, it's factual.
They still bought a loss-making programme [of a wonderful aircraft - with tons of potential, and excellent integrational capability into the Airbus lineup] for nothing. They knew from the onset that they would have to invest heavily. I am sure they did their maths and know they can get rewarded in due course.

wrongwayup · Thu Sep 06, 2018 5:13 pm

oldannyboy wrote:
They still bought a loss-making programme... for nothing. ...

True in terms of up front payment, but they did agree to fund the program losses (beyond a threshold). So while Airbus didn't put any cash into BBD's account, A will be putting a lot of cash out the door (that BBD won't have to) before they will see a return.

oldannyboy · Fri Sep 07, 2018 8:43 am

wrongwayup wrote:
oldannyboy wrote:
They still bought a loss-making programme... for nothing. ...

True in terms of up front payment, but they did agree to fund the program losses (beyond a threshold). So while Airbus didn't put any cash into BBD's account, A will be putting a lot of cash out the door (that BBD won't have to) before they will see a return.

Oh, yes, indeed. That was a given. It clearly means on the other hand that they see a lot of potential in the design, and think that the A220 is a very capable jet.

cougar15 · Fri Sep 07, 2018 9:05 am

lightsaber wrote:
keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Whoa K-man.

Do we need to look into your account security, or is the Lithium dosage finally dialed in?

Seriously, I want a real backlog for the A220. And with CFM, Pratt, and RR all having supply issues, the industry is wonkey this year.

Lightsaber

it has to be that funny stuff they legally smoke over there in the Nedlands, as generally I have the utmost respect for this member! Sure he got hacked...... :confused:

cpd · Fri Sep 07, 2018 10:33 am

cougar15 wrote:
lightsaber wrote:
keesje wrote:
Loosing a major LOI worth milions, the troubled A380 might be facing cancellations & supply chain problems continue to haunt Airbus. Another fresh blow for the guys in Toulouse.

Whoa K-man.

Do we need to look into your account security, or is the Lithium dosage finally dialed in?

Seriously, I want a real backlog for the A220. And with CFM, Pratt, and RR all having supply issues, the industry is wonkey this year.

Lightsaber

it has to be that funny stuff they legally smoke over there in the Nedlands, as generally I have the utmost respect for this member! Sure he got hacked......

Agreed, perhaps that account should be temporarily banned until it can be verified.

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