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Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 11:58 am

hvusslax wrote:
Icelandic business newspaper Viðskiptablaðið has some sources saying that Icelandair may end up cutting its fleet down by more than half, perhaps as small as 12 aircraft. Of course, all long term plans have been severely disrupted at most airlines in the world. I wonder what this means for Ielandair's fleet plans. Could this potentially accelerate a switch to an all Airbus fleet? Both because the fleet will be smaller and faster to replace and because there might be more recently built second hand A320/A321 NEOs coming to the market soon and with earlier delivery slots on new ones are also becoming available. But I guess there might be some issues getting rid of the existing fleet. The older 757s can be retired but finding someone to take the MAX off their hands is going to be difficult.


Switching fleets costs money which is something that airlines don’t have. If they are shrinking and cutting staff, going through the costs of buying new planes doesn’t make much sense to me.

It’s about survival and using their existing fleet Of 757s that’s already paid For is a lot cheaper than paying leases on new planes. Fuel is cheap now.
 
marcogr12
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 12:10 pm

Weatherwatcher1 wrote:
hvusslax wrote:
Icelandic business newspaper Viðskiptablaðið has some sources saying that Icelandair may end up cutting its fleet down by more than half, perhaps as small as 12 aircraft. Of course, all long term plans have been severely disrupted at most airlines in the world. I wonder what this means for Ielandair's fleet plans. Could this potentially accelerate a switch to an all Airbus fleet? Both because the fleet will be smaller and faster to replace and because there might be more recently built second hand A320/A321 NEOs coming to the market soon and with earlier delivery slots on new ones are also becoming available. But I guess there might be some issues getting rid of the existing fleet. The older 757s can be retired but finding someone to take the MAX off their hands is going to be difficult.


Switching fleets costs money which is something that airlines don’t have. If they are shrinking and cutting staff, going through the costs of buying new planes doesn’t make much sense to me.

It’s about survival and using their existing fleet Of 757s that’s already paid For is a lot cheaper than paying leases on new planes. Fuel is cheap now.


That might be the case now but it won't last forever and airline managers have to take action proactively with an insight into future costs that won't do them in..Sooner or later they will be forced to replace their non fuel-efficient fleet (both NB and WB) and i don;t see how they can do that with MAXs since nobody knows when they will fly again safely..They should thank their lucky stars that all local competition has been wiped out over the years and they are the dominant carrier again
Flying is breathing..no planes no life..
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 12:20 pm

marcogr12 wrote:
Weatherwatcher1 wrote:
hvusslax wrote:
Icelandic business newspaper Viðskiptablaðið has some sources saying that Icelandair may end up cutting its fleet down by more than half, perhaps as small as 12 aircraft. Of course, all long term plans have been severely disrupted at most airlines in the world. I wonder what this means for Ielandair's fleet plans. Could this potentially accelerate a switch to an all Airbus fleet? Both because the fleet will be smaller and faster to replace and because there might be more recently built second hand A320/A321 NEOs coming to the market soon and with earlier delivery slots on new ones are also becoming available. But I guess there might be some issues getting rid of the existing fleet. The older 757s can be retired but finding someone to take the MAX off their hands is going to be difficult.


Switching fleets costs money which is something that airlines don’t have. If they are shrinking and cutting staff, going through the costs of buying new planes doesn’t make much sense to me.

It’s about survival and using their existing fleet Of 757s that’s already paid For is a lot cheaper than paying leases on new planes. Fuel is cheap now.


That might be the case now but it won't last forever and airline managers have to take action proactively with an insight into future costs that won't do them in..Sooner or later they will be forced to replace their non fuel-efficient fleet (both NB and WB) and i don;t see how they can do that with MAXs since nobody knows when they will fly again safely..They should thank their lucky stars that all local competition has been wiped out over the years and they are the dominant carrier again


Icelandair is having to issue new shares to

The focus of the Company is to improve the liquidity and equity position as well as securing its long-term profitability. To achieve this, the Company is preparing to issue new shares.


https://www.globenewswire.com/news-rele ... Group.html

Spending the money that they are raising to buy new planes makes little sense. If they are needing to fund payroll with debt, why would they order new planes now?

Sooner or later they will replace their older planes. Given lack of funds and a shrinking airline, that is likely later.
 
jghealey
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 12:52 pm

Weatherwatcher1 wrote:
hvusslax wrote:
Icelandic business newspaper Viðskiptablaðið has some sources saying that Icelandair may end up cutting its fleet down by more than half, perhaps as small as 12 aircraft. Of course, all long term plans have been severely disrupted at most airlines in the world. I wonder what this means for Ielandair's fleet plans. Could this potentially accelerate a switch to an all Airbus fleet? Both because the fleet will be smaller and faster to replace and because there might be more recently built second hand A320/A321 NEOs coming to the market soon and with earlier delivery slots on new ones are also becoming available. But I guess there might be some issues getting rid of the existing fleet. The older 757s can be retired but finding someone to take the MAX off their hands is going to be difficult.


Switching fleets costs money which is something that airlines don’t have. If they are shrinking and cutting staff, going through the costs of buying new planes doesn’t make much sense to me.

It’s about survival and using their existing fleet Of 757s that’s already paid For is a lot cheaper than paying leases on new planes. Fuel is cheap now.


I agree - they almost certainly won't be looking at a new order unless Airbus is offering a very rosy discount. However, if the market is suddenly flodded with cheaper used A32x (which in itself is not a given, but it's possible), then it becomes more economically viable. The 757s will only have so much life left in them and what happens when fuel prices rise again? They've got to plan for the long term - I get that they will be short on cash but it's about making the business viable and maximising shareholder value in the longer term. They could even go with cheaper A321ceos, like WOW did, which would cover most of the network, and then when the economy (and therefore also revenue) picks up, they can order XLRs
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 2:33 pm

jghealey wrote:
Weatherwatcher1 wrote:
hvusslax wrote:
Icelandic business newspaper Viðskiptablaðið has some sources saying that Icelandair may end up cutting its fleet down by more than half, perhaps as small as 12 aircraft. Of course, all long term plans have been severely disrupted at most airlines in the world. I wonder what this means for Ielandair's fleet plans. Could this potentially accelerate a switch to an all Airbus fleet? Both because the fleet will be smaller and faster to replace and because there might be more recently built second hand A320/A321 NEOs coming to the market soon and with earlier delivery slots on new ones are also becoming available. But I guess there might be some issues getting rid of the existing fleet. The older 757s can be retired but finding someone to take the MAX off their hands is going to be difficult.


Switching fleets costs money which is something that airlines don’t have. If they are shrinking and cutting staff, going through the costs of buying new planes doesn’t make much sense to me.

It’s about survival and using their existing fleet Of 757s that’s already paid For is a lot cheaper than paying leases on new planes. Fuel is cheap now.


I agree - they almost certainly won't be looking at a new order unless Airbus is offering a very rosy discount. However, if the market is suddenly flodded with cheaper used A32x (which in itself is not a given, but it's possible), then it becomes more economically viable. The 757s will only have so much life left in them and what happens when fuel prices rise again? They've got to plan for the long term - I get that they will be short on cash but it's about making the business viable and maximising shareholder value in the longer term. They could even go with cheaper A321ceos, like WOW did, which would cover most of the network, and then when the economy (and therefore also revenue) picks up, they can order XLRs


How does the A321ceo help them? Both Their 737MAX and 757s have more range. The A321XLR is appealing, but it’s 3 years away and very expensive. The base A321neo doesn’t help Icelandair with the range needed for their network to fully replace 757s. The A321ceo is even worse.

They already have more planes than they need. The older 757s can be permanently parked. They have a dozen 757s that are only about 20 years old and have another 5-10 years of life in them. Now is not the time to be buying new planes especially when they have 757s that are paid off so they don’t have to worry about paying lessors and financiers for airplanes sitting on the ground. They will order more planes in the future, but it doesn’t make much sense in 2020. They have six new 737s with three more built waiting to be delivered. That should be enough for a while. Replacing a fleet when the airline is needing to issue shares to obtain equity doesn’t make much sense.
 
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aemoreira1981
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 3:52 pm

The major problem is getting out of the MAX leases (FI took delivery of five B38Ms and one B39M; 4 of the six are under sale-leaseback leases and the other two are under JOLCO leases.) That said, I could see FI renegotiating the remaining MAX orders for 4-5 B788 aircraft and possibly the two Boeing-owned B753s while figuring out how to reject the MAX leases. Then Airbus could offer FI a whole heap of A21N aircraft. The fleet would then be B763s (with B788 replacements), B753s, and A21Ns. FI would be looking at about 30-32 A21Ns.

Right now, FI is in a good spot with a mostly fully-owned fleet (only their cargo B752s and one B763 are leased). They would be looking at replacement once this has all passed; their major costs right now are parking fees and salaries.
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 4:01 pm

aemoreira1981 wrote:
The major problem is getting out of the MAX leases (FI took delivery of five B38Ms and one B39M; 4 of the six are under sale-leaseback leases and the other two are under JOLCO leases.) That said, I could see FI renegotiating the remaining MAX orders for 4-5 B788 aircraft and possibly the two Boeing-owned B753s while figuring out how to reject the MAX leases. Then Airbus could offer FI a whole heap of A21N aircraft. The fleet would then be B763s (with B788 replacements), B753s, and A21Ns. FI would be looking at about 30-32 A21Ns.

Right now, FI is in a good spot with a mostly fully-owned fleet (only their cargo B752s and one B763 are leased). They would be looking at replacement once this has all passed; their major costs right now are parking fees and salaries.


Has Icelandair actually said they want to get out of their 737s?
 
VSMUT
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 5:58 pm

Weatherwatcher1 wrote:
How does the A321ceo help them? Both Their 737MAX and 757s have more range. The A321XLR is appealing, but it’s 3 years away and very expensive. The base A321neo doesn’t help Icelandair with the range needed for their network to fully replace 757s. The A321ceo is even worse.


The basic A321s are no slouches. A late model A321ceo can cover their entire European network and can even reach some of their North American destinations like Boston, New York, Toronto and Halifax. Those wouldn't even break the record for an A321ceo, JFK to SFO is longer than all those routes.

A basic A321neo will cover even more, most North American destinations can be reached with that one, although they will have to sacrifice payload for fuel on some of the longest trips.

I'm not going to comment on the viability of Icelandair replacing its fleet during the crisis, but don't forget that the much cheaper basic A321ceo and A321neo can operate just fine in a fleet alongside a small handful of more expensive A321LRs flying to only the most distant destinations. It doesn't have to be an all-in expensive A321XLR fleet, they can mix and match with cheaper variants.


Weatherwatcher1 wrote:
They already have more planes than they need. The older 757s can be permanently parked. They have a dozen 757s that are only about 20 years old and have another 5-10 years of life in them. Now is not the time to be buying new planes especially when they have 757s that are paid off so they don’t have to worry about paying lessors and financiers for airplanes sitting on the ground. They will order more planes in the future, but it doesn’t make much sense in 2020. They have six new 737s with three more built waiting to be delivered. That should be enough for a while. Replacing a fleet when the airline is needing to issue shares to obtain equity doesn’t make much sense.


Selling a fleet of owned aircraft and leasing their replacements raises capital right here and now.
 
Blerg
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 6:19 pm

jghealey wrote:
Blerg wrote:
How far could A321neo and A320neo fly from KEF? Could they fly to all the places B757 flies to right now?

I think they could handle all of the European network, but not to all the US destinations (looking at their route map now quite a few including YVR look out of reach. Though with demand predicted to drop anyway, maybe they could put these routes on hold until they're able to get XLRs from 2023, complementing A20N/A21Ns which they get in the meantime. I doubt there'll be many NEOs on the used market coming out of this as many of them are with larger, more financially resilient carriers (who would be more likely to get rid of older aircraft) but I'm sure there will be enough for Icelandair to pick up a few


Well I am sure they wouldn't retire all of their B757 at the same time so destinations such as YVR could still stay as they are. Some others could be replaced by the A320/1neo.
 
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Phosphorus
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 6:43 pm

A lot of RR-powered 757's will become available on the other side of this crisis. They are expected to be looking for home, even if relatively inexpensively.
Is it possible that once Icelandair emerges, and travel restarts, they could actually lease in some 757's, replacing some of the older frames? This would reduce the pressure to buy (more) new planes.
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VSMUT
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 6:56 pm

Phosphorus wrote:
A lot of RR-powered 757's will become available on the other side of this crisis. They are expected to be looking for home, even if relatively inexpensively.
Is it possible that once Icelandair emerges, and travel restarts, they could actually lease in some 757's, replacing some of the older frames? This would reduce the pressure to buy (more) new planes.


But which 757s? The ones from the US3 are tired old workhorses, certainly cheap to lease, but not to operate and maintain.
 
eaa3
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 7:27 pm

Phosphorus wrote:
A lot of RR-powered 757's will become available on the other side of this crisis. They are expected to be looking for home, even if relatively inexpensively.
Is it possible that once Icelandair emerges, and travel restarts, they could actually lease in some 757's, replacing some of the older frames? This would reduce the pressure to buy (more) new planes.


I don't know if there's any point to leasing something that's super cheap. They would just buy it instead of bothering with leasing. However, I suspect their current fleet is big enough with depressed demand.
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 8:37 pm

VSMUT wrote:
The basic A321s are no slouches. A late model A321ceo can cover their entire European network and can even reach some of their North American destinations like Boston, New York, Toronto and Halifax. Those wouldn't even break the record for an A321ceo, JFK to SFO is longer than all those routes.

A basic A321neo will cover even more, most North American destinations can be reached with that one, although they will have to sacrifice payload for fuel on some of the longest trips.

I'm not going to comment on the viability of Icelandair replacing its fleet during the crisis, but don't forget that the much cheaper basic A321ceo and A321neo can operate just fine in a fleet alongside a small handful of more expensive A321LRs flying to only the most distant destinations. It doesn't have to be an all-in expensive A321XLR fleet, they can mix and match with cheaper variants. . .


I thought The whole point of the thread is the viability of Icelandair buying Airbus. What you say about A321 range is true. What you didn’t say is that the 737-8 has transatlantic range and is already in the Icelandair fleet.
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 8:40 pm

VSMUT wrote:
Phosphorus wrote:
A lot of RR-powered 757's will become available on the other side of this crisis. They are expected to be looking for home, even if relatively inexpensively.
Is it possible that once Icelandair emerges, and travel restarts, they could actually lease in some 757's, replacing some of the older frames? This would reduce the pressure to buy (more) new planes.


But which 757s? The ones from the US3 are tired old workhorses, certainly cheap to lease, but not to operate and maintain.


The US3 757s aren’t all tired workhorses. American has 25 757s that are less than 20 years old. 757s typically operate 25-30 years. Similarly United and Delta have many 757s that are less than 20 years old which are younger than many A320s currently in operation
 
marcogr12
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 9:41 pm

Weatherwatcher1 wrote:
VSMUT wrote:
The basic A321s are no slouches. A late model A321ceo can cover their entire European network and can even reach some of their North American destinations like Boston, New York, Toronto and Halifax. Those wouldn't even break the record for an A321ceo, JFK to SFO is longer than all those routes.

A basic A321neo will cover even more, most North American destinations can be reached with that one, although they will have to sacrifice payload for fuel on some of the longest trips.

I'm not going to comment on the viability of Icelandair replacing its fleet during the crisis, but don't forget that the much cheaper basic A321ceo and A321neo can operate just fine in a fleet alongside a small handful of more expensive A321LRs flying to only the most distant destinations. It doesn't have to be an all-in expensive A321XLR fleet, they can mix and match with cheaper variants. . .


I thought The whole point of the thread is the viability of Icelandair buying Airbus. What you say about A321 range is true. What you didn’t say is that the 737-8 has transatlantic range and is already in the Icelandair fleet.


You mean 737-8 /-9 MAX that dont fly...They have them grounded, so it;s like not having them..Does even Boeing know when they will fly again? No..And dont tell me in a few months because we
ve been hearing that since last year...They need a solution..Right now the Covid-19 situation is forcing them to cut services, ground planes etc like all airlines..But once traffic picks up, are they gonna continue using the 757s even on routes where sth. smaller is needed? So if they don't go with Airbus,will they lease 738s for their european network of flights up to 5-6h
Flying is breathing..no planes no life..
 
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richard2179
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 9:53 pm

Why would Icelandair need Airbus A320NEO and A321NEO aircraft? They evaluated the 737-8MAX and determined it to meet their needs. And some 737-10MAX aircraft at bargain basement prices and they are good. Remember, Keflavik is in the middle of the Atlantic Ocean so TATL range may not be needed!
 
VSMUT
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 10:01 pm

Weatherwatcher1 wrote:
VSMUT wrote:
The basic A321s are no slouches. A late model A321ceo can cover their entire European network and can even reach some of their North American destinations like Boston, New York, Toronto and Halifax. Those wouldn't even break the record for an A321ceo, JFK to SFO is longer than all those routes.

A basic A321neo will cover even more, most North American destinations can be reached with that one, although they will have to sacrifice payload for fuel on some of the longest trips.

I'm not going to comment on the viability of Icelandair replacing its fleet during the crisis, but don't forget that the much cheaper basic A321ceo and A321neo can operate just fine in a fleet alongside a small handful of more expensive A321LRs flying to only the most distant destinations. It doesn't have to be an all-in expensive A321XLR fleet, they can mix and match with cheaper variants. . .


I thought The whole point of the thread is the viability of Icelandair buying Airbus. What you say about A321 range is true. What you didn’t say is that the 737-8 has transatlantic range and is already in the Icelandair fleet.


The 737-8 is grounded, which is why I didn't bring it up. If Icelandair needs to perform a maneuvre where they replace the entire 757 family in a hurry, they obviously can't do it with the 737 family. The 737NG, like the A321ceo, can't do all routes, and there is nothing airworthy in that family that can.
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 10:59 pm

VSMUT wrote:
Weatherwatcher1 wrote:
VSMUT wrote:
The basic A321s are no slouches. A late model A321ceo can cover their entire European network and can even reach some of their North American destinations like Boston, New York, Toronto and Halifax. Those wouldn't even break the record for an A321ceo, JFK to SFO is longer than all those routes.

A basic A321neo will cover even more, most North American destinations can be reached with that one, although they will have to sacrifice payload for fuel on some of the longest trips.

I'm not going to comment on the viability of Icelandair replacing its fleet during the crisis, but don't forget that the much cheaper basic A321ceo and A321neo can operate just fine in a fleet alongside a small handful of more expensive A321LRs flying to only the most distant destinations. It doesn't have to be an all-in expensive A321XLR fleet, they can mix and match with cheaper variants. . .


I thought The whole point of the thread is the viability of Icelandair buying Airbus. What you say about A321 range is true. What you didn’t say is that the 737-8 has transatlantic range and is already in the Icelandair fleet.


The 737-8 is grounded, which is why I didn't bring it up. If Icelandair needs to perform a maneuvre where they replace the entire 757 family in a hurry, they obviously can't do it with the 737 family. The 737NG, like the A321ceo, can't do all routes, and there is nothing airworthy in that family that can.


Why does Icelandair need to replace the entire 757 family in a hurry? I would think the opposite is true given the current lack of demand in air travel
 
Weatherwatcher1
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 11:03 pm

marcogr12 wrote:
Weatherwatcher1 wrote:
VSMUT wrote:
The basic A321s are no slouches. A late model A321ceo can cover their entire European network and can even reach some of their North American destinations like Boston, New York, Toronto and Halifax. Those wouldn't even break the record for an A321ceo, JFK to SFO is longer than all those routes.

A basic A321neo will cover even more, most North American destinations can be reached with that one, although they will have to sacrifice payload for fuel on some of the longest trips.

I'm not going to comment on the viability of Icelandair replacing its fleet during the crisis, but don't forget that the much cheaper basic A321ceo and A321neo can operate just fine in a fleet alongside a small handful of more expensive A321LRs flying to only the most distant destinations. It doesn't have to be an all-in expensive A321XLR fleet, they can mix and match with cheaper variants. . .


I thought The whole point of the thread is the viability of Icelandair buying Airbus. What you say about A321 range is true. What you didn’t say is that the 737-8 has transatlantic range and is already in the Icelandair fleet.


You mean 737-8 /-9 MAX that dont fly...They have them grounded, so it;s like not having them..Does even Boeing know when they will fly again? No..And dont tell me in a few months because we
ve been hearing that since last year...They need a solution..Right now the Covid-19 situation is forcing them to cut services, ground planes etc like all airlines..But once traffic picks up, are they gonna continue using the 757s even on routes where sth. smaller is needed? So if they don't go with Airbus,will they lease 738s for their european network of flights up to 5-6h


What’s wrong with their 757s? They have more than they need. Eventually the 737s will fly again. I’m not seeing a Reason why an airline during this financially challenged time would embark on a massive fleet replacement
 
marcogr12
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Re: Icelandair reiterates interest in potential Airbus order

Fri Apr 17, 2020 11:32 pm

Weatherwatcher1 wrote:
marcogr12 wrote:
Weatherwatcher1 wrote:

I thought The whole point of the thread is the viability of Icelandair buying Airbus. What you say about A321 range is true. What you didn’t say is that the 737-8 has transatlantic range and is already in the Icelandair fleet.


You mean 737-8 /-9 MAX that dont fly...They have them grounded, so it;s like not having them..Does even Boeing know when they will fly again? No..And dont tell me in a few months because we
ve been hearing that since last year...They need a solution..Right now the Covid-19 situation is forcing them to cut services, ground planes etc like all airlines..But once traffic picks up, are they gonna continue using the 757s even on routes where sth. smaller is needed? So if they don't go with Airbus,will they lease 738s for their european network of flights up to 5-6h


What’s wrong with their 757s? They have more than they need. Eventually the 737s will fly again. I’m not seeing a Reason why an airline during this financially challenged time would embark on a massive fleet replacement


Eventually..yes..That could be in 2 yrs time..But until that time comes, is it viable financially now that traffic is down to use the 757s on thin routes or should they lease 737NGs which have smaller capacity (in FI config. i mean, not LCC)? They are forced to fly all of their european routes with 757s..Heavily trafficked ones get the 767 or 753 like CPH,AMS,LHR,CDG...But the rest may not warrant a 757 for some time, esp.if Europe is hit with a new Covid-19 wave from Oct/Nov..
Flying is breathing..no planes no life..
 
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Antaras
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Re: Icelandair reiterates interest in potential Airbus order

Sat Apr 18, 2020 2:24 am

richard2179 wrote:
Why would Icelandair need Airbus A320NEO and A321NEO aircraft? They evaluated the 737-8MAX and determined it to meet their needs. And some 737-10MAX aircraft at bargain basement prices and they are good. Remember, Keflavik is in the middle of the Atlantic Ocean so TATL range may not be needed!

Not the regular neo but the A321LR/XLR would make sense as a 757-replacement.
However, the "one-type strategy" is becoming less popular nowadays. Besides the cost-saving benefit, there a risk when a carrier only operates 1 type, as that carrier will be slapped painfully when that type has trouble (imagining a carrier with all-Max fleet). Carriers, especially LCCs, are starting acquiring new types, for example, Vietjet-an all-A320 operator- is having 200 Max on order or Norweigan is having neos on order/
If you disagree with my statement, assume that it was just a joke :duck:
 
Blerg
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Re: Icelandair reiterates interest in potential Airbus order

Sat Apr 18, 2020 5:13 am

Antaras wrote:
richard2179 wrote:
Why would Icelandair need Airbus A320NEO and A321NEO aircraft? They evaluated the 737-8MAX and determined it to meet their needs. And some 737-10MAX aircraft at bargain basement prices and they are good. Remember, Keflavik is in the middle of the Atlantic Ocean so TATL range may not be needed!

Not the regular neo but the A321LR/XLR would make sense as a 757-replacement.
However, the "one-type strategy" is becoming less popular nowadays. Besides the cost-saving benefit, there a risk when a carrier only operates 1 type, as that carrier will be slapped painfully when that type has trouble (imagining a carrier with all-Max fleet). Carriers, especially LCCs, are starting acquiring new types, for example, Vietjet-an all-A320 operator- is having 200 Max on order or Norweigan is having neos on order/


I remember when FI introduced the MAX, many of their European destinations immediately saw a boost in frequencies. This indicates that a plane such as 757 was a limiting factor for them. For an airline that relies heavily on transfer traffic, frequencies play a big role. I think it was Berlin and Dusseldorf that got the MAX (exclusively) and went almost double daily.

Also, A321LR/XLR could allow them to get access to new markets they couldn't serve efficiently in the past. Some like Athens, Thessaloniki, Istanbul, Kiev, Tel Aviv, Beirut, Cairo... The 757 might no longer be the right aircraft to break into massive markets such as TLV, BEY, IST, CAI... where airlines such as Turkish Airlines, Lufthansa, Austrian Airlines... dominate in. With a new generation of aircraft that could change.
 
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TWA772LR
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Re: Icelandair reiterates interest in potential Airbus order

Sat Apr 18, 2020 6:00 am

Blerg wrote:
Antaras wrote:
richard2179 wrote:
Why would Icelandair need Airbus A320NEO and A321NEO aircraft? They evaluated the 737-8MAX and determined it to meet their needs. And some 737-10MAX aircraft at bargain basement prices and they are good. Remember, Keflavik is in the middle of the Atlantic Ocean so TATL range may not be needed!

Not the regular neo but the A321LR/XLR would make sense as a 757-replacement.
However, the "one-type strategy" is becoming less popular nowadays. Besides the cost-saving benefit, there a risk when a carrier only operates 1 type, as that carrier will be slapped painfully when that type has trouble (imagining a carrier with all-Max fleet). Carriers, especially LCCs, are starting acquiring new types, for example, Vietjet-an all-A320 operator- is having 200 Max on order or Norweigan is having neos on order/


I remember when FI introduced the MAX, many of their European destinations immediately saw a boost in frequencies. This indicates that a plane such as 757 was a limiting factor for them. For an airline that relies heavily on transfer traffic, frequencies play a big role. I think it was Berlin and Dusseldorf that got the MAX (exclusively) and went almost double daily.

Also, A321LR/XLR could allow them to get access to new markets they couldn't serve efficiently in the past. Some like Athens, Thessaloniki, Istanbul, Kiev, Tel Aviv, Beirut, Cairo... The 757 might no longer be the right aircraft to break into massive markets such as TLV, BEY, IST, CAI... where airlines such as Turkish Airlines, Lufthansa, Austrian Airlines... dominate in. With a new generation of aircraft that could change.

Those MAX were extra aircraft that allowed FI to increase frequency because they haven't started retiring the 757 yet. If they really wanted to boost frequency/capacity they could take the US3 757/767s if/when they become available, and if they wanted to do it today they could scrounge up some NGs real quick. But by then the MAX will be flying and we may still in the economic downturn caused by the current pandemic
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Blerg
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Re: Icelandair reiterates interest in potential Airbus order

Sat Apr 18, 2020 6:31 am

TWA772LR wrote:
Blerg wrote:
Antaras wrote:
Not the regular neo but the A321LR/XLR would make sense as a 757-replacement.
However, the "one-type strategy" is becoming less popular nowadays. Besides the cost-saving benefit, there a risk when a carrier only operates 1 type, as that carrier will be slapped painfully when that type has trouble (imagining a carrier with all-Max fleet). Carriers, especially LCCs, are starting acquiring new types, for example, Vietjet-an all-A320 operator- is having 200 Max on order or Norweigan is having neos on order/


I remember when FI introduced the MAX, many of their European destinations immediately saw a boost in frequencies. This indicates that a plane such as 757 was a limiting factor for them. For an airline that relies heavily on transfer traffic, frequencies play a big role. I think it was Berlin and Dusseldorf that got the MAX (exclusively) and went almost double daily.

Also, A321LR/XLR could allow them to get access to new markets they couldn't serve efficiently in the past. Some like Athens, Thessaloniki, Istanbul, Kiev, Tel Aviv, Beirut, Cairo... The 757 might no longer be the right aircraft to break into massive markets such as TLV, BEY, IST, CAI... where airlines such as Turkish Airlines, Lufthansa, Austrian Airlines... dominate in. With a new generation of aircraft that could change.

Those MAX were extra aircraft that allowed FI to increase frequency because they haven't started retiring the 757 yet. If they really wanted to boost frequency/capacity they could take the US3 757/767s if/when they become available, and if they wanted to do it today they could scrounge up some NGs real quick. But by then the MAX will be flying and we may still in the economic downturn caused by the current pandemic


I don't think it's just because they got extra aircraft, I think it's because those MAX have less seats and probably better economics on such medium range flights. After all, isn't MAX exactly made for such a purpose? I think MAX would have finally allowed FI to complete the formation of a second wave of departures which they do need long-term. Pushing this same agenda with the B757 would have cost them a lot more thus creating unnecessary extra expenses. That is why those extra frequencies were pushed back once MAX was grounded.
 
dc855
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Re: Icelandair reiterates interest in potential Airbus order

Sat Apr 18, 2020 10:51 am

One massive advantage that the A32X series has over the MAX in the case of Icelandair will be the extra range of the LR and XLR versions. The XLR will basically allow Icelandair to fly to almost every city in the US from KEF. I can see this becoming very important for the company's TATL business as more and more companies start flying XLRs across the Atlantic. The economics of the narrowbody XLR will allow operators on both sides of the pond to start offering more thin routes with greater frequency and this will certainly hurt FI's business model. If for example SAS is offering direct flights between say Copenhagen and Baltimore for the same or lower price than FI is offering, who is going to want to stop in KEF? The XLR will however not reach cities in the west or southwest from mainland Europe so Icelandair will be able to hold onto it's niche there. I could see the XLR open up viable one stop connections for FI between Europe and airports such as LAX, SFO, SAN, SMF, LAS and PHX. These are at least nice options to have for FI's fleet planners that the MAX (or the 757 for that matter) do not offer.
 
Ryanair01
Posts: 485
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Re: Icelandair reiterates interest in potential Airbus order

Sat Apr 18, 2020 12:03 pm

Icelandair knows that the 737-MAX is a very damaged brand. People in Iceland know about Icelandair more than say people in Europe or the US know about their airlines. It only takes a small proportion to be nervous about the MAX at it will hurt FI.

For the moment, old 757s with low ownership costs are ideal. You can park them and not burn lease charges. FI also have cash in hand from the sale of their hotel chain. All the FI staff I know have been laid off for at least another 8 weeks without pay. So they are in an OK place to conserve cash and have a higher bank balance from asset sales.

Their most immediate task is delaying debt repayments. Beyond that, it's impossible to make many long-term strategic moves without knowing when a vaccine will be widespread. However, the A321 does increasingly look a good aircraft for them, in terms of size, availability (arguably as others collapse) and range. However, the costs of re-tooling towards Airbus are big and not helpful from a cash position.
 
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hvusslax
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Re: Icelandair reiterates interest in potential Airbus order

Wed Jun 10, 2020 7:34 am

Weatherwatcher1 wrote:
aemoreira1981 wrote:
The major problem is getting out of the MAX leases (FI took delivery of five B38Ms and one B39M; 4 of the six are under sale-leaseback leases and the other two are under JOLCO leases.) That said, I could see FI renegotiating the remaining MAX orders for 4-5 B788 aircraft and possibly the two Boeing-owned B753s while figuring out how to reject the MAX leases. Then Airbus could offer FI a whole heap of A21N aircraft. The fleet would then be B763s (with B788 replacements), B753s, and A21Ns. FI would be looking at about 30-32 A21Ns.

Right now, FI is in a good spot with a mostly fully-owned fleet (only their cargo B752s and one B763 are leased). They would be looking at replacement once this has all passed; their major costs right now are parking fees and salaries.


Has Icelandair actually said they want to get out of their 737s?


It's being reported now in Icelandic media that Icelandair wants out of taking delivery of the 10 remaining 737s. With a contraction in operations and a low fuel price, they can continue to rely on their fully owned 757/767 fleet for some years.

It is not actually clear that Icelandair will be able to avoid bankruptcy if they are forced to take the MAX.
 
Blerg
Posts: 4749
Joined: Tue Jan 09, 2018 11:42 am

Re: Icelandair reiterates interest in potential Airbus order

Wed Jun 10, 2020 7:51 am

hvusslax wrote:
Weatherwatcher1 wrote:
aemoreira1981 wrote:
The major problem is getting out of the MAX leases (FI took delivery of five B38Ms and one B39M; 4 of the six are under sale-leaseback leases and the other two are under JOLCO leases.) That said, I could see FI renegotiating the remaining MAX orders for 4-5 B788 aircraft and possibly the two Boeing-owned B753s while figuring out how to reject the MAX leases. Then Airbus could offer FI a whole heap of A21N aircraft. The fleet would then be B763s (with B788 replacements), B753s, and A21Ns. FI would be looking at about 30-32 A21Ns.

Right now, FI is in a good spot with a mostly fully-owned fleet (only their cargo B752s and one B763 are leased). They would be looking at replacement once this has all passed; their major costs right now are parking fees and salaries.


Has Icelandair actually said they want to get out of their 737s?


It's being reported now in Icelandic media that Icelandair wants out of taking delivery of the 10 remaining 737s. With a contraction in operations and a low fuel price, they can continue to rely on their fully owned 757/767 fleet for some years.

It is not actually clear that Icelandair will be able to avoid bankruptcy if they are forced to take the MAX.


Can't they sue Boeing to get out of the MAX deal? After all, many airlines around the world have cancelled their deals for the MAX, why can't Icelandair do the same?
 
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Momo1435
Posts: 1214
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Re: Icelandair reiterates interest in potential Airbus order

Wed Jun 10, 2020 8:07 am

There have actually not been many airlines that have cancelled MAX orders, the fast majority of recent cancellations were by leasing companies. It all depends on the contracts, if there are clauses about non delivery by Boeing, and on their negotiation power for compensations.

In the meantime there will also be plenty of younger 757 and 767 available on the 2nd hand market if they need extra capacity or short term replacements.
 
FlyingElvii
Posts: 1226
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Re: Icelandair reiterates interest in potential Airbus order

Wed Jun 10, 2020 3:11 pm

With recent events, there is going to be a LOT of excess lift available for peak short term leasing, for the next several years, at reasonable prices. As stated above, plenty of 757/767 have suddenly become available, for both purchase and parts.
It makes good sense for them to buckle down in the core niche, while leasing capacity for the summer peak.

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