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lightsaber
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AirBaltic negotiating for faster A220 delivery

Tue Apr 21, 2020 10:49 pm

In all the doom and gloom, this surprised me.

https://www.bloomberg.com/amp/news/arti ... ssion=true

The East European carrier has started talks with Airbus SE to accelerate handovers of its A220 model, Chief Executive Officer Martin Gauss said in an interview. The existing plan to assemble a fleet of 50 of the narrow-body jets by 2025 could come to fruition a couple of years early, he said.

This is aggressive. To the bold!

Lightsaber
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PepeTheFrog
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Re: AirBaltic negotiating for faster A220 delivery

Tue Apr 21, 2020 10:54 pm

Air Baltic is gambling.

Perhaps this strategy will be successful, or end up badly.
Good moaning!
 
oldJoe
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Re: AirBaltic negotiating for faster A220 delivery

Tue Apr 21, 2020 11:00 pm

PepeTheFrog wrote:
Air Baltic is gambling.

Perhaps this strategy will be successful, or end up badly.


They go the same road like Wizz Air or Vietnam Airlines. If their pockets are deep enough it will work , because legacies in Europe struggle
 
VSMUT
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Re: AirBaltic negotiating for faster A220 delivery

Tue Apr 21, 2020 11:04 pm

They also just fired most of the First Officers and demoted a lot of Captains to FOs (on the A220, not 737 or Q400), after being short of roughly a third of the required A220 crew for the past 2 years. Doesn't really sound like an airline that's too serious about accelerating deliveries.
 
MIflyer12
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Re: AirBaltic negotiating for faster A220 delivery

Tue Apr 21, 2020 11:36 pm

lightsaber wrote:
In all the doom and gloom, this surprised me.

https://www.bloomberg.com/amp/news/arti ... ssion=true

The East European carrier has started talks with Airbus SE to accelerate handovers of its A220 model, Chief Executive Officer Martin Gauss said in an interview. The existing plan to assemble a fleet of 50 of the narrow-body jets by 2025 could come to fruition a couple of years early, he said.

This is aggressive. To the bold!

Lightsaber


From what carriers' likely cancellations or deferrals could Airbus accelerate Air Baltic's deliveries by two years?
 
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lightsaber
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 4:57 am

For those worried about AirBaltic's staffing, this summer flying is still heavily reduced (see below link).

As much as I want professionals paid well, there is no longer a shortage nor will there be for 2 or 3 years.

Don't worry, I already know this effects my industry even more.

https://www.breakingtravelnews.com/news ... er-summer/

MIflyer12 wrote:
lightsaber wrote:
In all the doom and gloom, this surprised me.

https://www.bloomberg.com/amp/news/arti ... ssion=true

The East European carrier has started talks with Airbus SE to accelerate handovers of its A220 model, Chief Executive Officer Martin Gauss said in an interview. The existing plan to assemble a fleet of 50 of the narrow-body jets by 2025 could come to fruition a couple of years early, he said.

This is aggressive. To the bold!

Lightsaber


From what carriers' likely cancellations or deferrals could Airbus accelerate Air Baltic's deliveries by two years?

Who doesn't want to defer? Of all the obstacles, this is the least.

Lightsaber
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Blerg
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 5:07 am

Didn't they receive the first installment of state aid a week ago or so?

My guess is that this is just for PR purposes to show that they are still doing really well when in reality it's the opposite. Even before corona they were struggling as I fear they added too much capacity in a market that has so-so demand.
 
JonesNL
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 6:54 am

If I am correct they also charter their A220 to other airliners. Is it possible they are gambling on the chartering/leasing out all birds that they can not fly themselves? The A220 will be the cheapest plane to operate and much easier to fill in times where shrinking routes will be the name of the game...
 
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 7:04 am

oldJoe wrote:
PepeTheFrog wrote:
Air Baltic is gambling.

Perhaps this strategy will be successful, or end up badly.


They go the same road like Wizz Air or Vietnam Airlines. If their pockets are deep enough it will work , because legacies in Europe struggle


Only effective with profitable carriers, I guess.
Vietnam AL, WizzAir and airBatic all have good business in the past few years, that's why they are so risky. Especially with VN and BT are state-owned carriers, and there is no reason for those carriers to be scared here.
If you disagree with my statement, assume that it was just a joke :duck:
 
Blerg
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 7:18 am

Antaras wrote:
oldJoe wrote:
PepeTheFrog wrote:
Air Baltic is gambling.

Perhaps this strategy will be successful, or end up badly.


They go the same road like Wizz Air or Vietnam Airlines. If their pockets are deep enough it will work , because legacies in Europe struggle


Only effective with profitable carriers, I guess.
Vietnam AL, WizzAir and airBatic all have good business in the past few years, that's why they are so risky. Especially with VN and BT are state-owned carriers, and there is no reason for those carriers to be scared here.


VN is safe but BT not so much, their gamble needs to pay off otherwise they might struggle once the Latvian state can no longer pump money into them. Once the crisis passes BT will no longer be eligible to receive easy money from the government.

There is also something else BT needs to take into consideration and that is Belavia which is in expansion mode and which can receive as much state aid as it wishes from the Belorussian government. The two carriers are competing for the same transfer passengers.
 
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 8:10 am

If they're smart with their negotiation, this could be a good two-way door - if demand starts picking up strongly in the next couple years, they'll be poised to take advantage and if demand is slow to recover, they can look to defer or pressure Airbus to cut rate.

Now that they've retired the 737/Q400 and they're single subfleet, they're entirely dependent on Airbus' A220 delivery schedule for any growth (or even the ability to ramp back to previous capacity level). Probably a smart move to try to secure additional flexibility in their delivery schedule, especially since Airbus will be eager to pull orders forward.
#AvGeek
 
tvh
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 1:03 pm

aeroblogger wrote:
If they're smart with their negotiation, this could be a good two-way door - if demand starts picking up strongly in the next couple years, they'll be poised to take advantage and if demand is slow to recover, they can look to defer or pressure Airbus to cut rate.

Now that they've retired the 737/Q400 and they're single subfleet, they're entirely dependent on Airbus' A220 delivery schedule for any growth (or even the ability to ramp back to previous capacity level). Probably a smart move to try to secure additional flexibility in their delivery schedule, especially since Airbus will be eager to pull orders forward.


It is a good thing if older aircraft get replaced sooner because of the crisses.
 
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lightsaber
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 1:27 pm

tvh wrote:
aeroblogger wrote:
If they're smart with their negotiation, this could be a good two-way door - if demand starts picking up strongly in the next couple years, they'll be poised to take advantage and if demand is slow to recover, they can look to defer or pressure Airbus to cut rate.

Now that they've retired the 737/Q400 and they're single subfleet, they're entirely dependent on Airbus' A220 delivery schedule for any growth (or even the ability to ramp back to previous capacity level). Probably a smart move to try to secure additional flexibility in their delivery schedule, especially since Airbus will be eager to pull orders forward.


It is a good thing if older aircraft get replaced sooner because of the crisses.

It could be a good long term fit. The key is the flexibility of the orders.

Lightsaber
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Revelation
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 2:09 pm

Blerg wrote:
Didn't they receive the first installment of state aid a week ago or so?

My guess is that this is just for PR purposes to show that they are still doing really well when in reality it's the opposite. Even before corona they were struggling as I fear they added too much capacity in a market that has so-so demand.

AirBaltic has a rich uncle, it is 80% owned by the Latvian state. They can be more aggressive than a commercial enterprise since they know if things go badly the government will always bail them out.
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Blerg
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 2:50 pm

Revelation wrote:
Blerg wrote:
Didn't they receive the first installment of state aid a week ago or so?

My guess is that this is just for PR purposes to show that they are still doing really well when in reality it's the opposite. Even before corona they were struggling as I fear they added too much capacity in a market that has so-so demand.

AirBaltic has a rich uncle, it is 80% owned by the Latvian state. They can be more aggressive than a commercial enterprise since they know if things go badly the government will always bail them out.


Not really, Latvia is in the EU meaning they can be generous once every ten years. If not then state aid has to be approved by the EU and if they get the green light then massive cost cutting measures have to follow. That's what happened to LO back in 2012 if I remember correctly.
 
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 2:55 pm

Blerg wrote:
Revelation wrote:
Blerg wrote:
Didn't they receive the first installment of state aid a week ago or so?

My guess is that this is just for PR purposes to show that they are still doing really well when in reality it's the opposite. Even before corona they were struggling as I fear they added too much capacity in a market that has so-so demand.

AirBaltic has a rich uncle, it is 80% owned by the Latvian state. They can be more aggressive than a commercial enterprise since they know if things go badly the government will always bail them out.


Not really, Latvia is in the EU meaning they can be generous once every ten years. If not then state aid has to be approved by the EU and if they get the green light then massive cost cutting measures have to follow. That's what happened to LO back in 2012 if I remember correctly.

Italy is also in the EU and look at Alitalia... :eek:
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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Blerg
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 2:57 pm

Revelation wrote:
Blerg wrote:
Revelation wrote:
AirBaltic has a rich uncle, it is 80% owned by the Latvian state. They can be more aggressive than a commercial enterprise since they know if things go badly the government will always bail them out.


Not really, Latvia is in the EU meaning they can be generous once every ten years. If not then state aid has to be approved by the EU and if they get the green light then massive cost cutting measures have to follow. That's what happened to LO back in 2012 if I remember correctly.

Italy is also in the EU and look at Alitalia... :eek:


Yes but Latvia is not Italy. ;) Remember Malev and Cyprus Airways?
 
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 3:01 pm

Blerg wrote:
Revelation wrote:
Blerg wrote:
Didn't they receive the first installment of state aid a week ago or so?

My guess is that this is just for PR purposes to show that they are still doing really well when in reality it's the opposite. Even before corona they were struggling as I fear they added too much capacity in a market that has so-so demand.

AirBaltic has a rich uncle, it is 80% owned by the Latvian state. They can be more aggressive than a commercial enterprise since they know if things go badly the government will always bail them out.


Not really, Latvia is in the EU meaning they can be generous once every ten years. If not then state aid has to be approved by the EU and if they get the green light then massive cost cutting measures have to follow. That's what happened to LO back in 2012 if I remember correctly.

Also I suspect EU will be less keen on allowing state aid if it is being used to help finance expansion (in other words, taking over market share) rather than keeping airline alive and people employed.

Blerg wrote:
Revelation wrote:
Blerg wrote:

Not really, Latvia is in the EU meaning they can be generous once every ten years. If not then state aid has to be approved by the EU and if they get the green light then massive cost cutting measures have to follow. That's what happened to LO back in 2012 if I remember correctly.

Italy is also in the EU and look at Alitalia... :eek:


Yes but Latvia is not Italy. ;) Remember Malev and Cyprus Airways?

:checkmark: The EU is very much like Animal Farm. All animals (countries) are equal, but some animals are more equal than others.
 
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intrance
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 3:28 pm

Pretty much all of airBaltic’s expansion has been state aided/financed. They’re just a bit more creative with the accounting to avoid EU measures ;).

Without state aid they would not have survived past 2011, and they are now reaping the benefit of the state aid that allowed them to order a pretty huge fleet of brand new aircraft while still barely making profits.
 
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Re: AirBaltic negotiating for faster A220 delivery

Wed Apr 22, 2020 8:30 pm

tvh wrote:
aeroblogger wrote:
If they're smart with their negotiation, this could be a good two-way door - if demand starts picking up strongly in the next couple years, they'll be poised to take advantage and if demand is slow to recover, they can look to defer or pressure Airbus to cut rate.

Now that they've retired the 737/Q400 and they're single subfleet, they're entirely dependent on Airbus' A220 delivery schedule for any growth (or even the ability to ramp back to previous capacity level). Probably a smart move to try to secure additional flexibility in their delivery schedule, especially since Airbus will be eager to pull orders forward.


It is a good thing if older aircraft get replaced sooner because of the crisses.


Q400s were not old. 9 Year Old frames
 
Blerg
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 5:14 am

Yesterday I was looking at their June timetable and they definitely don't need extra aircraft so this is all PR.
 
Kikko19
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 6:53 am

Blerg wrote:
Yesterday I was looking at their June timetable and they definitely don't need extra aircraft so this is all PR.


I guess they rely that they can provide A/C to other airlines (SK?) when yet not large planes will be requested during recovery. it's a bet I guess but capacity will need reduction so they are doing right IMHO (likely other regional airlines will do the same?)
 
Blerg
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 7:00 am

Kikko19 wrote:
Blerg wrote:
Yesterday I was looking at their June timetable and they definitely don't need extra aircraft so this is all PR.


I guess they rely that they can provide A/C to other airlines (SK?) when yet not large planes will be requested during recovery. it's a bet I guess but capacity will need reduction so they are doing right IMHO (likely other regional airlines will do the same?)


Yeah but their C-series is not that small, it has 145 seats. It's about the same size as an A319. If they had a plane with 80 to 100 seats then I could see this being a thing.
 
Kikko19
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 9:31 am

Blerg wrote:
Kikko19 wrote:
Blerg wrote:
Yesterday I was looking at their June timetable and they definitely don't need extra aircraft so this is all PR.


I guess they rely that they can provide A/C to other airlines (SK?) when yet not large planes will be requested during recovery. it's a bet I guess but capacity will need reduction so they are doing right IMHO (likely other regional airlines will do the same?)


Yeah but their C-series is not that small, it has 145 seats. It's about the same size as an A319. If they had a plane with 80 to 100 seats then I could see this being a thing.

yes, but still smaller cap than a320, 738 and a321. i could imagine it SK using them in the triangle sto-osl-cph (just as an example) or to FRA and LON in the beginning.
 
Aither
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 10:31 am

It's not a surprise that faster than anticipated fleet restructuring can lead to new orders for aircraft to be delivered in 4+ years.
Never trust the obvious
 
baje427
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 1:36 pm

It really is a gamble especially given the engine issues the A220 has had imagine if they have to be grounded.
 
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lightsaber
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 2:04 pm

baje427 wrote:
It really is a gamble especially given the engine issues the A220 has had imagine if they have to be grounded.

The resonance in the control software was solved:

https://www.flightglobal.com/safety/a22 ... 58.article

Analysis has indicated that low-pressure compressor vane schedules were generating a condition within the engine that led to “acoustic resonance” and damaged the stage-one rotor, says the FAA, leading to its failure.

The offending software has been removed from the engines.

The other issues have been addressed (although it takes time for parts to enter the fleet, a la Trent1000) such as new combustor liners.

AirBaltic has already committed to all A220.

This is a gamble. A gamble certain to acquire the aircraft on excellent terms. Only due to the exceptionally low cost per flight is it worth trying this gamble.

Lightsaber
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Flow2706
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 3:13 pm

Personally I think we will have a massive decline in the short term, a "rebound" in the medium term and in the long term the passenger numbers will increase as forecasted before the crisis. So far the industry recovered from all crisis (including 9/11) and usually after the recovery there is some sort of "rebound". I think in 2022/2023 we will have significant under capacities in the market...so this move by Air Baltic might be a smart one.
 
Calledonian
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Re: AirBaltic negotiating for faster A220 delivery

Thu Apr 23, 2020 6:48 pm

Presumably part of the logic of this was to offset the decision to retire the remaining 737's and Q400's early. Either way, I think this might be a smart move. BT have gained a solid reputation in the past few years, and with a very young fleet, they should be in a good position to cash in on that post Covid.

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