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Nean1
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 29, 2021 7:27 pm

Jetport wrote:
MIflyer12 wrote:
Taxi645 wrote:
Look, Airbus are going to the A220 ramp up eventually anyway. What I'm saying is that doing more of that ramp up now in stead of ramping up the A320 is LESS costly now than it will be if you do it later. Ramping up the A320 is not free money if the market is not ready to take them yet. The market will more easily absorb the A220 and set's you up much better for another significant ramp up when you start preparing for the A220-500.


Early last year they were talking about A220 breakeven in the highly non-specific 'mid-decade' on a production rate of 10+ per month.

https://www.flightglobal.com/programmes ... 53.article

'We're losing money on every frame. Let's make more!' is not always a sensible path. If it's just a problem of spreading fixed overheads over more production (and the demand is there with customers who have money, as you assert), why haven't they boosted production already? Their losses may be a problem of labor productivity that doesn't go away with higher production rates; it may be a pricing problem of purchased components (and they need time to arm-twist or re-source); it may be a problem of constrained supplier output as suggested by Revelation.

You need to accept the fact they rolled back the output increases. Just how they see that as profit-maximizing may remain a bit of a mystery to you and me.


MIflyer12 is on to something here. Airbus makes lots of money on every A319 and A320, they lose money on every A220.

The A220 has some major hurdles to overcome to ever be a successful aircraft program. Development costs are irrelevant now, but there are several other hurdles which may spell doom for this program. The A220 costs way too much to make. With full carbon fiber construction they may never be able get costs low enough to make money on this aircraft. Most of the A220's sold so far were at prices far too low to make money, maybe even at 10/ month.
With competition from below from the E190/195 E2 and from above from the 737/A32X Airbus just doesn't have the pricing power to charge what they need to to make the A220 a profitable program. Even though it is very efficient, based on what I have read about the A220 the only way it makes sense at profitable prices for Airbus is if you can't fill the 737/A32X or if you have very long flights vs. the E190/195 E2. I assume Airbus is sticking with this program even though it is burning cash because they are hopeful they can make a future cost breakthrough or they can drive the E190/195 E2 from the market.



Looking at projects with a high percentage of composite materials and considered technically successful such as the B787, A220 and A400, I cannot help thinking that the ambition of structural innovation has surpassed common sense.
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 29, 2021 9:18 pm

JonesNL wrote:
From Covid reference thread: HNA is bankrupt, Many subsidiaries with mostly narrowbodies that will find new homes on Chinese market. Only Hainan Airlines has big number of young WB's: 38x787, 33xA330 and 2xa350.

Current fleet of Hainan Airlines according to Wikipedia:
Aircraft names In Fleet Orders
Airbus A330-200 9 —
Airbus A330-300 24 —
Airbus A350-900 2 2
Boeing 737-800 137 —
Boeing 737MAX8 11 39
Boeing 787-8 10 —
Boeing 787-9 28 8

Wonder if the WB's will just be divided in China for other airlines...

This is a huge dump of aircraft to other Chinese airlines. This will moderate the demand from China for years.

Lightsaber
 
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ADent
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 29, 2021 10:06 pm

morrisond wrote:
It sounds like Boeing won't be adding too much 777 Passenger Capacity until 2024 now https://leehamnews.com/2021/01/27/big-l ... more-35721

So they are still making 2/month in 2021 - about 24.
And 40ish backlog of 777Fs.

So are they going all 777F or building a stock pile of 777-9? That stock pile of 787s didn’t work out so well.

Or will they call off their game of chicken and adjust production downward again?

Interesting:
Geoff1947 wrote:
The most recent 24 frames , LN1670 - 1693, have comprised

8 777-9
8 777-300ER
7 777F
1 777-200LR
from: viewtopic.php?f=3&t=1455933&start=50
 
Jetport
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 29, 2021 10:07 pm

lightsaber wrote:
JonesNL wrote:
From Covid reference thread: HNA is bankrupt, Many subsidiaries with mostly narrowbodies that will find new homes on Chinese market. Only Hainan Airlines has big number of young WB's: 38x787, 33xA330 and 2xa350.

Current fleet of Hainan Airlines according to Wikipedia:
Aircraft names In Fleet Orders
Airbus A330-200 9 —
Airbus A330-300 24 —
Airbus A350-900 2 2
Boeing 737-800 137 —
Boeing 737MAX8 11 39
Boeing 787-8 10 —
Boeing 787-9 28 8

Wonder if the WB's will just be divided in China for other airlines...

This is a huge dump of aircraft to other Chinese airlines. This will moderate the demand from China for years.

Lightsaber


Is Hainan actually liquidating, or will they go through a US style Chapter 11 and keep most of their aircraft? If they are liquidating, you are absolutely correct about Chinese demand destruction.
 
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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 30, 2021 3:19 am

Jetport wrote:
lightsaber wrote:
JonesNL wrote:
From Covid reference thread: HNA is bankrupt, Many subsidiaries with mostly narrowbodies that will find new homes on Chinese market. Only Hainan Airlines has big number of young WB's: 38x787, 33xA330 and 2xa350.

Current fleet of Hainan Airlines according to Wikipedia:
Aircraft names In Fleet Orders
Airbus A330-200 9 —
Airbus A330-300 24 —
Airbus A350-900 2 2
Boeing 737-800 137 —
Boeing 737MAX8 11 39
Boeing 787-8 10 —
Boeing 787-9 28 8

Wonder if the WB's will just be divided in China for other airlines...

This is a huge dump of aircraft to other Chinese airlines. This will moderate the demand from China for years.

Lightsaber


Is Hainan actually liquidating, or will they go through a US style Chapter 11 and keep most of their aircraft? If they are liquidating, you are absolutely correct about Chinese demand destruction.

I can only find evidence here and there on Chinese airline profitability. The offering of cheap fares to travel around implies over-supply.

If kept, over supply by HNA airlines hurting the competition for years. If transferred, over-suplied elsewhere.

This is more good aircraft looking for a home.
I count 11 airlines in the group, I counted 606 aircraft in a bankrupt entity.

https://en.m.wikipedia.org/wiki/HNA_Group

One way or the other, there is a problem here exasperating an over supply, in my opinion.

Lightsaber
 
jagraham
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Re: The case for more aircraft production cuts/playing chicken

Sat Feb 06, 2021 5:26 pm

One thing everybody is missing on the replacement cycle is cash flow. New airplanes cost whether they are being used or not. Airlines are now being dragged under by the cost of new planes they can't use. Whereas old, paid for, planes - as long as their maintenance costs don't go sky high - can be parked for the mothball costs and the storage fees.

Plus, the "average" cost advantages of new don't work out everywhere. Take United. They are flying 14 of 19 77As - and haven't gotten rid of the other 5, not even N777UA. Meanwhile, they have plenty of 77Es parked, There are reasons for that. I would also bet that they are underutilizing their 787s, so they could fly a shiny new 787 in place of their 77As if they so chose. In some niches, the old plane not only works fine, but doesn't cost much more to operate. Airlines weigh the capital costs and equipping costs, and if the capital costs and equipping costs outweigh the fuel savings (and perhaps maintenance savings) on the new plane, the old one stays. S

So you can't just say all widebodies built before 2000 are gone. A lot will be gone, but a percentage needs to be figured out. Those are widebodies that will not be replaced soon, and each of those widebodies is a new plane that will not be taken up.
 
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Re: The case for more aircraft production cuts/playing chicken

Sat Feb 06, 2021 10:44 pm

jagraham wrote:
One thing everybody is missing on the replacement cycle is cash flow. New airplanes cost whether they are being used or not. Airlines are now being dragged under by the cost of new planes they can't use. Whereas old, paid for, planes - as long as their maintenance costs don't go sky high - can be parked for the mothball costs and the storage fees.

Plus, the "average" cost advantages of new don't work out everywhere. Take United. They are flying 14 of 19 77As - and haven't gotten rid of the other 5, not even N777UA. Meanwhile, they have plenty of 77Es parked, There are reasons for that. I would also bet that they are underutilizing their 787s, so they could fly a shiny new 787 in place of their 77As if they so chose. In some niches, the old plane not only works fine, but doesn't cost much more to operate. Airlines weigh the capital costs and equipping costs, and if the capital costs and equipping costs outweigh the fuel savings (and perhaps maintenance savings) on the new plane, the old one stays. S

So you can't just say all widebodies built before 2000 are gone. A lot will be gone, but a percentage needs to be figured out. Those are widebodies that will not be replaced soon, and each of those widebodies is a new plane that will not be taken up.

To build on your comments:
1. Aircraft have maintenance and insurance burden if kept flyable. They can be parked with lower monthly costs, but a high return to service cost.
2. A good chunk of older aircraft with usable service life will be parked and return to service. Both widebodies and narrobodies. I'll give the example of the NW parked A320s returning to delta service.

For widebodies, some fraction of the market will be eroded by today's longer range narrowbodies.

Lightsaber
 
MIflyer12
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Re: The case for more aircraft production cuts/playing chicken

Sat Feb 06, 2021 11:42 pm

jagraham wrote:
So you can't just say all widebodies built before 2000 are gone. A lot will be gone, but a percentage needs to be figured out. Those are widebodies that will not be replaced soon, and each of those widebodies is a new plane that will not be taken up.


You aren't expecting 23 year old ex AA/DL/AC 767s, or 22 year old 777s, to sit in the desert until 2024 and then find new life with major North American or EU passenger carriers, are you?

Economic value isn't just a function of remaining life on frames or engines - it's also a function of every other alternative. It's likely 2024 will come and there still will be plenty of A330s and 787s available second-hand. AM, LATAM, and HNA Group might still be in bankruptcy proceedings in 2024!
 
AngMoh
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Re: The case for more aircraft production cuts/playing chicken

Sun Feb 07, 2021 8:23 am

MIflyer12 wrote:
jagraham wrote:
So you can't just say all widebodies built before 2000 are gone. A lot will be gone, but a percentage needs to be figured out. Those are widebodies that will not be replaced soon, and each of those widebodies is a new plane that will not be taken up.


You aren't expecting 23 year old ex AA/DL/AC 767s, or 22 year old 777s, to sit in the desert until 2024 and then find new life with major North American or EU passenger carriers, are you?

Economic value isn't just a function of remaining life on frames or engines - it's also a function of every other alternative. It's likely 2024 will come and there still will be plenty of A330s and 787s available second-hand. AM, LATAM, and HNA Group might still be in bankruptcy proceedings in 2024!


It all depends. After SARS in 2003, NW took a 747 off the NRT-SIN route and replaced it with a smaller DC-10 which came out of the desert after being parked there for some years. It was a flying wreck. When I flew it luggage was delayed due to a problem with the cargo door. The day before my colleagues were delayed for 1 hour as the door could not open (maybe a problem with pressurisation system). About a year later it was replaced with a brand new A330. So airlines will take planes from the desert especially if it is for a relatively short period if it fits in overall operating plans.
 
jagraham
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Re: The case for more aircraft production cuts/playing chicken

Mon Feb 08, 2021 5:21 am

MIflyer12 wrote:
jagraham wrote:
So you can't just say all widebodies built before 2000 are gone. A lot will be gone, but a percentage needs to be figured out. Those are widebodies that will not be replaced soon, and each of those widebodies is a new plane that will not be taken up.


You aren't expecting 23 year old ex AA/DL/AC 767s, or 22 year old 777s, to sit in the desert until 2024 and then find new life with major North American or EU passenger carriers, are you?

Economic value isn't just a function of remaining life on frames or engines - it's also a function of every other alternative. It's likely 2024 will come and there still will be plenty of A330s and 787s available second-hand. AM, LATAM, and HNA Group might still be in bankruptcy proceedings in 2024!


I am expecting 22 year old 777s to be seriously underutilized, and in some cases parked, and return to service with UA and perhaps AA.

The 763s have resale value. Most of DL's 763s will have been sold. UAs 763s are a bigger question mark, as they were being converted to high J for transatlantic use.

The 764s do not have resale value and will return to service with UA. DL has chosen to not park theirs, and they continue to get D1 conversion even through these awful times.

Your case would have been better made with the EU3 . . .
 
Jetport
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 11, 2021 11:00 pm

I have been reading many stories on how quickly domestic travel will likely return in the US, which is an encouraging sign for single aisle demand. Are other parts of the world as optimistic on short haul travel demand?
 
mileduets
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 11, 2021 11:23 pm

Jetport wrote:
I have been reading many stories on how quickly domestic travel will likely return in the US, which is an encouraging sign for single aisle demand. Are other parts of the world as optimistic on short haul travel demand?


Europe will take much longer to recover, if ever. There's a notable shift towards high speed- and overnight trains replacing some domestic air travel.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Mar 12, 2021 12:46 am

[threeid][/threeid]
Jetport wrote:
I have been reading many stories on how quickly domestic travel will likely return in the US, which is an encouraging sign for single aisle demand. Are other parts of the world as optimistic on short haul travel demand?

That is the hope. But the CDC is advising otherwise:
Every time that there is a surge in travel we have a surge in cases in this country. We know that many of our variants have emerged from international places and we know that the travel corridor is a place where people are mixing a lot. We are really trying to restrain travel at this time period of time and we're hopeful that our next set of guidance will have more science around what vaccinated people can do, perhaps travel being among them.

https://news.yahoo.com/cdc-issues-guida ... 34056.html

I love traveling, I want to travel. But my ex's lawyer will focus on the "restrain travel at this time", so for us divorced, it will curtail travel.

I know my employer is actively soliciting people to travel to conferences; I infer not attending has cost sales.

There needs to be guidance from the CDC allowing travel or to stop discouraging it. Business travel needs to tell people to go at times.

Lightsaber
 
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Re: The case for more aircraft production cuts/playing chicken

Wed Mar 17, 2021 4:49 pm

Leeham is putting the current production cuts in perspective:
https://leehamnews.com/2021/03/16/putti ... more-36151

I remain of the opinion the system is over-supplied with aircraft as lease returns still need to go through the system (e.g., Indigo accepting A321NEO while returning A320CEO). It is my opinion that airlines are accepting new NEO and MAX, but lease returning CEO and NG.

This is quite the opportunity for airlines that scrounge on old aircraft (Allegiant, Volotea, Delta, American). I bet more airlines will top off fleets with used aircraft in the next few years until the ratio if new prices to used prices goes back to historical norms.

Lightsaber
 
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sassiciai
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Re: The case for more aircraft production cuts/playing chicken

Wed Mar 17, 2021 5:27 pm

mileduets wrote:
Jetport wrote:
I have been reading many stories on how quickly domestic travel will likely return in the US, which is an encouraging sign for single aisle demand. Are other parts of the world as optimistic on short haul travel demand?


Europe will take much longer to recover, if ever. There's a notable shift towards high speed- and overnight trains replacing some domestic air travel.

I am interested in your comment on a notable shift towards high speed and overnight trains - could you elaborate please, and supply a reference or 2 for further reading
 
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Re: The case for more aircraft production cuts/playing chicken

Wed Mar 17, 2021 8:53 pm

lightsaber wrote:
I remain of the opinion the system is over-supplied with aircraft as lease returns still need to go through the system (e.g., Indigo accepting A321NEO while returning A320CEO). It is my opinion that airlines are accepting new NEO and MAX, but lease returning CEO and NG.

This is quite the opportunity for airlines that scrounge on old aircraft (Allegiant, Volotea, Delta, American). I bet more airlines will top off fleets with used aircraft in the next few years until the ratio if new prices to used prices goes back to historical norms.

The pricing incentive has compressed, because the true cost of new and nearly new aircraft is so low, especially when compensation credits are included. Used aircraft can only be priced so low, given away or customers paid to take them.

We will see lease returns placed, in deals which cost the lessee virtually nothing (over the life of the lease), but permit the lessor to write down values over 5-10 years.

The big question is what OEM's do to stimulate the market? They won't want used aircraft to allow new acquisitions to be deferred, so watch new parts prices increase markedly, especially single sources they (or key partners) control. And announcements on terminating support of older aircraft altogether, with tacit support from airworthiness authorities.
 
Sokes
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 18, 2021 4:03 am

510 twins and 210 quads out of service in the pandemic, so something around 15% of widebodies.
https://leehamnews.com/2021/03/16/putti ... more-36151
That includes A330 Neos, so not all retired.

I think once one removes A340s, some A380s, low MTOW A330s, B747-400s, B777-200s, B777-300s and maybe some B777-200ERs the widebody market should be o.k.. According to the link only 8% of B777s are out of service. I believe quite a few more can be retired.
I'm actually surprised that we discuss about B777-300ERs getting retired.

Lots of old narrowbodies out there. So I think narrowbodies should be o.k..

Speaking of the Leeham link: what was the crazy production spike at the end of the 1960s?
 
mileduets
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 18, 2021 11:55 am

sassiciai wrote:
mileduets wrote:
Jetport wrote:
I have been reading many stories on how quickly domestic travel will likely return in the US, which is an encouraging sign for single aisle demand. Are other parts of the world as optimistic on short haul travel demand?


Europe will take much longer to recover, if ever. There's a notable shift towards high speed- and overnight trains replacing some domestic air travel.

I am interested in your comment on a notable shift towards high speed and overnight trains - could you elaborate please, and supply a reference or 2 for further reading


Austria's ÖBB with support from DB and SBB is investing massively in a larger overnight train network. Here's an article about the order of up to 700 passenger coaches worth €1.5 Billion.
https://www.railjournal.com/fleet/siemens-unveils-first-painted-car-body-for-obb-nightjet-fleet/
These "Night jet" trains typically connect city pairs like Vienna-Hamburg or Zürich-Berlin competing with or supplementing airliners.
Here's the current network:
https://www.railjournal.com/fleet/siemens-unveils-first-painted-car-body-for-obb-nightjet-fleet/
Plans exist to expand it further.
https://company.sbb.ch/en/media/media-relations/press-releases/detail.html/2020/9/1509-1

Rapid train network expansion can be exemplified by the Billions invested in transalpine lines in France, Italy, Switzerland and Austria:

The Swiss NRLA project connecting Switzerland with the Italian Industrial center around Milan was completed last year with the opening of the Monte Ceneri base tunnel. Total investment CHF 22.6 Billion:
https://www.alptransit.ch/en/nrla/the-nrla/
The Brenner base tunnel between Austria and Italy (Venezia region) is currently being built: Estimated costs € 10 Billion, opening planned in 2028. https://www.bbt-se.com/en/
Construction for the Euralpine Tunnel connection the Lyon (FRA) with the Torino (ITA) has started also; its cost are estimated to be around €8 Billion; the opening is estimated to be in 2029 https://www.telt-sas.com/en/telt-homepage/.
The Gotthard base tunnel is currently the longest traffic tunnel worldwide, it will be overtaken by the Brenner base tunnel, which will again be overtaken by the Euralpine Tunnel. It's a bit like the race for the tallest building...

There's much more going on, but I don't want to expand this too much. You will get the idea.
To illustrate the effect: the airport of Lugano Agno has basically been made redundant by the opening of the Gotthard base tunnel which reduces travel time from the Ticino to Zurich by an hour. It lost all of its commercial flights.

To sum it up: Night train network expansion and the shortening of travel times in general will make railways much more competitive vs. short distance flights. This is accentuated by the tendency to move airports further from the center of European cities, increasing travel time and costs for passengers, while railway stations usually remain located in the heart of cities.
 
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 18, 2021 6:06 pm

smartplane wrote:
lightsaber wrote:
I remain of the opinion the system is over-supplied with aircraft as lease returns still need to go through the system (e.g., Indigo accepting A321NEO while returning A320CEO). It is my opinion that airlines are accepting new NEO and MAX, but lease returning CEO and NG.

This is quite the opportunity for airlines that scrounge on old aircraft (Allegiant, Volotea, Delta, American). I bet more airlines will top off fleets with used aircraft in the next few years until the ratio if new prices to used prices goes back to historical norms.

The pricing incentive has compressed, because the true cost of new and nearly new aircraft is so low, especially when compensation credits are included. Used aircraft can only be priced so low, given away or customers paid to take them.

We will see lease returns placed, in deals which cost the lessee virtually nothing (over the life of the lease), but permit the lessor to write down values over 5-10 years.

The big question is what OEM's do to stimulate the market? They won't want used aircraft to allow new acquisitions to be deferred, so watch new parts prices increase markedly, especially single sources they (or key partners) control. And announcements on terminating support of older aircraft altogether, with tacit support from airworthiness authorities.

Interesting, so many things in motion all at the same time.

This suggests those taking the leases will want a maintenance contract to avoid the risk of the vendors jacking up the price of parts, and the lessors will have to price that into their "nearly free" leases designed to eat up more of the aircraft's lifespan.
 
smartplane
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 18, 2021 7:52 pm

Revelation wrote:
smartplane wrote:
The pricing incentive has compressed, because the true cost of new and nearly new aircraft is so low, especially when compensation credits are included. Used aircraft can only be priced so low, given away or customers paid to take them.

We will see lease returns placed, in deals which cost the lessee virtually nothing (over the life of the lease), but permit the lessor to write down values over 5-10 years.

The big question is what OEM's do to stimulate the market? They won't want used aircraft to allow new acquisitions to be deferred, so watch new parts prices increase markedly, especially single sources they (or key partners) control. And announcements on terminating support of older aircraft altogether, with tacit support from airworthiness authorities.

Interesting, so many things in motion all at the same time.

This suggests those taking the leases will want a maintenance contract to avoid the risk of the vendors jacking up the price of parts, and the lessors will have to price that into their "nearly free" leases designed to eat up more of the aircraft's lifespan.

Pre-existing maintenance contracts and fixed parts price contracts pose interesting challenges for OEM's amidst all this uncertainty.

For example, engine maintenance contracts may be very lucrative, especially during periods of low use, even if the contract reverts to low use or storage pricing, while fixed price aircraft parts may be very unprofitable.

Should see some very attractive trade in deals to exit these liabilities, with air frame OEM's buying out engine maintenance contracts. All the more reason for two future marriages - Airbus and RR, Boeing and GE.
 
CowAnon
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 18, 2021 9:06 pm

mileduets wrote:

Thanks for the info, very illuminating. The second link (about the current night train network) is identical to the first, though.

Also, the night jet trains are not HSR, correct? Is anyone trying to get an overnight HSR network going?
 
mileduets
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Re: The case for more aircraft production cuts/playing chicken

Thu Mar 18, 2021 9:46 pm

CowAnon wrote:
Thanks for the info, very illuminating. The second link (about the current night train network) is identical to the first, though.


Here's the link I missed with the current nightjet network: https://www.nightjet.com/en/reiseziele

CowAnon wrote:
Also, the night jet trains are not HSR, correct? Is anyone trying to get an overnight HSR network going?


No, they are not HSR trains; Their aim is to depart in the evening at 1-2 selected departure cities within an hour or so (like Zürich and Basel) at around 9-10 pm and arrive at their destination (for example Hamburg) in the early morning without any stops in between. This permits travelers to enjoy a good night's sleep and arrive at their destination ready for a full day's work or shopping fun. High speed trains are not really required, as 8-10 hours are sufficient to reach a radius of more than 1'000 km. Night trains hence can travel at the same speed as the nightly cargo trains sharing the railway network without too many complications.
What they can profit from however is the new HSR infrastructure, like the tunnels mentioned above. With the new tunnels, more city pairs theoretically become viable, like for example Munich and Rome or Berlin and Venice.
 
Jetport
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Re: The case for more aircraft production cuts/playing chicken

Fri May 21, 2021 2:33 pm

Looks like Boeing plans to ramp up 737 production earlier than anticipated.

https://finance.yahoo.com/news/exclusiv ... 53458.html
 
JonesNL
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Re: The case for more aircraft production cuts/playing chicken

Fri May 28, 2021 1:40 pm

Not sure if it posted anywhere: Airbus is planning pre Covid level of production target of 64 per month from 2023 Q2.

https://www.bbc.com/news/business-57267194

https://www.airbus.com/newsroom/press-r ... plans.html
 
Opus99
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Re: The case for more aircraft production cuts/playing chicken

Fri May 28, 2021 1:55 pm

JonesNL wrote:
Not sure if it posted anywhere: Airbus is planning pre Covid level of production target of 64 per month from 2023 Q2.

https://www.bbc.com/news/business-57267194

https://www.airbus.com/newsroom/press-r ... plans.html

And of course Willie Walsh comes in with not so fast

https://twitter.com/laurence_frost/stat ... 79081?s=21
 
JonesNL
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Re: The case for more aircraft production cuts/playing chicken

Fri May 28, 2021 3:05 pm

Opus99 wrote:
JonesNL wrote:
Not sure if it posted anywhere: Airbus is planning pre Covid level of production target of 64 per month from 2023 Q2.

https://www.bbc.com/news/business-57267194

https://www.airbus.com/newsroom/press-r ... plans.html

And of course Willie Walsh comes in with not so fast

https://twitter.com/laurence_frost/stat ... 79081?s=21


He is saying surprisingly little; he says let’s wait and see. Something neither A or B can or will do…
 
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Re: The case for more aircraft production cuts/playing chicken

Fri May 28, 2021 4:29 pm

JonesNL wrote:
Opus99 wrote:
JonesNL wrote:
Not sure if it posted anywhere: Airbus is planning pre Covid level of production target of 64 per month from 2023 Q2.

https://www.bbc.com/news/business-57267194

https://www.airbus.com/newsroom/press-r ... plans.html

And of course Willie Walsh comes in with not so fast

https://twitter.com/laurence_frost/stat ... 79081?s=21

He is saying surprisingly little; he says let’s wait and see. Something neither A or B can or will do…

Actual quotes from the actual article behind the tweet:

“Let’s wait and see, because obviously there is a huge disconnect between what the manufacturers say they’re going to produce and what the airlines decide to buy,” Walsh, previously head of British Airways owner IAG, told Reuters.

“So, you know that they’re in the business of selling. I don’t see that there’s going to be the requirement for whatever it is they’re producing,” he added in an interview.

Ref: https://www.reuters.com/article/airbus- ... SL5N2NF3IC

It's an interesting quote coming from a guy who is the head of the international airline industry trade association on one hand, but on the other is still WW who is known for being flamboyant.

I think Airbus has been remarkably effective at holding airlines to the letter of the law and getting them to accept delivery on aircraft they'd much rather defer, which presumably is what helps give them the confidence to boost production to such high levels.

Maybe a few deliveries will be refused, but they seem confident that far more will be accepted than refused.

It does make me wonder if there is a "point of no return" where the airlines simply can't afford to take planes at the rate they are being produced, and if we will hit that point or not.

Not to mention leasing firms, who must be getting crushed by the weight of all the previous generation airliners being returned to them with little hope of finding future homes at good rates.

Yet Boeing has been pretty good at securing new orders for MAX in recent times with big new orders from AS, WN and FR, so maybe WW is referring to some of the smaller airlines that IATA represents?

Or maybe WW is off the mark and both A and B will successfully ramp up to and beyond pre-covid levels in the next two years?
 
Sokes
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 2:41 am

Revelation wrote:
I think Airbus has been remarkably effective at holding airlines to the letter of the law and getting them to accept delivery on aircraft they'd much rather defer, which presumably is what helps give them the confidence to boost production to such high levels.

Maybe a few deliveries will be refused, but they seem confident that far more will be accepted than refused.

It does make me wonder if there is a "point of no return" where the airlines simply can't afford to take planes at the rate they are being produced, and if we will hit that point or not.

Not to mention leasing firms, who must be getting crushed by the weight of all the previous generation airliners being returned to them with little hope of finding future homes at good rates.

Yet Boeing has been pretty good at securing new orders for MAX in recent times with big new orders from AS, WN and FR, so maybe WW is referring to some of the smaller airlines that IATA represents?

Or maybe WW is off the mark and both A and B will successfully ramp up to and beyond pre-covid levels in the next two years?

There are lots of old narrowbodies that may carry on or may retire. New tech is not as important as on long ranges.

I think Airbus is fully right to enforce the contracts. If one orders years in advance one gets all the rewards if demand increases.

There is an Indian airline which managed to grow to incredible size. They ordered many years in advance. At times of delivery the price of the plane was much higher. The airline sold the planes to lessors and leased them back. It used the profit from sale to subsidize tickets. Naturally they grew big.

Since early booking airlines get all the rewards in a growing market, they have to take the risk as well.
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 4:37 am

Revelation wrote:
JonesNL wrote:
Opus99 wrote:
And of course Willie Walsh comes in with not so fast

https://twitter.com/laurence_frost/stat ... 79081?s=21

He is saying surprisingly little; he says let’s wait and see. Something neither A or B can or will do…

Actual quotes from the actual article behind the tweet:

“Let’s wait and see, because obviously there is a huge disconnect between what the manufacturers say they’re going to produce and what the airlines decide to buy,” Walsh, previously head of British Airways owner IAG, told Reuters.

“So, you know that they’re in the business of selling. I don’t see that there’s going to be the requirement for whatever it is they’re producing,” he added in an interview.

Ref: https://www.reuters.com/article/airbus- ... SL5N2NF3IC

It's an interesting quote coming from a guy who is the head of the international airline industry trade association on one hand, but on the other is still WW who is known for being flamboyant.

I think Airbus has been remarkably effective at holding airlines to the letter of the law and getting them to accept delivery on aircraft they'd much rather defer, which presumably is what helps give them the confidence to boost production to such high levels.

Maybe a few deliveries will be refused, but they seem confident that far more will be accepted than refused.

It does make me wonder if there is a "point of no return" where the airlines simply can't afford to take planes at the rate they are being produced, and if we will hit that point or not.

Not to mention leasing firms, who must be getting crushed by the weight of all the previous generation airliners being returned to them with little hope of finding future homes at good rates.

Yet Boeing has been pretty good at securing new orders for MAX in recent times with big new orders from AS, WN and FR, so maybe WW is referring to some of the smaller airlines that IATA represents?

Or maybe WW is off the mark and both A and B will successfully ramp up to and beyond pre-covid levels in the next two years?

I see the production rates just too high.
One one hand production costs are in control. For high utilization it is worth buying new.

The market value of used A320CEO and 737-800 are down 15% to 30%. High production rates will further depress values
https://www.fitchratings.com/research/s ... 25-05-2021

I look at Indigo, Easyjet, and Ryanair. If they are receiving aircraft, they are returning older aircraft.

As neither Boeing nor Airbus make a lot off ancillary sales (vs. the engine makers), they'll push out prior aircraft.

Frieghter conversions will absorb some, but not enough.

Your point on the leasing firms getting crushed must be true. It does make one wonder if there is a breaking point. Airlines are broke. There are always clauses to differ 18+ months out.

I do not think the system can absorb a thousand plus aircraft per year until we have the economy back on decent footing.

Lightsaber
 
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Taxi645
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 5:58 am

Revelation wrote:
JonesNL wrote:
Opus99 wrote:
And of course Willie Walsh comes in with not so fast

https://twitter.com/laurence_frost/stat ... 79081?s=21

He is saying surprisingly little; he says let’s wait and see. Something neither A or B can or will do…

Actual quotes from the actual article behind the tweet:

“Let’s wait and see, because obviously there is a huge disconnect between what the manufacturers say they’re going to produce and what the airlines decide to buy,” Walsh, previously head of British Airways owner IAG, told Reuters.

“So, you know that they’re in the business of selling. I don’t see that there’s going to be the requirement for whatever it is they’re producing,” he added in an interview.

Ref: https://www.reuters.com/article/airbus- ... SL5N2NF3IC

It's an interesting quote coming from a guy who is the head of the international airline industry trade association on one hand, but on the other is still WW who is known for being flamboyant.

I think Airbus has been remarkably effective at holding airlines to the letter of the law and getting them to accept delivery on aircraft they'd much rather defer, which presumably is what helps give them the confidence to boost production to such high levels.

Maybe a few deliveries will be refused, but they seem confident that far more will be accepted than refused.

It does make me wonder if there is a "point of no return" where the airlines simply can't afford to take planes at the rate they are being produced, and if we will hit that point or not.

Not to mention leasing firms, who must be getting crushed by the weight of all the previous generation airliners being returned to them with little hope of finding future homes at good rates.

Yet Boeing has been pretty good at securing new orders for MAX in recent times with big new orders from AS, WN and FR, so maybe WW is referring to some of the smaller airlines that IATA represents?

Or maybe WW is off the mark and both A and B will successfully ramp up to and beyond pre-covid levels in the next two years?


Isn't this just Airbus shooting across the bow; not only are we looking at yet unreleased A320 variants, we are also prepared to significantly ramp up the production rate to introduce it onto the market at considerable numbers right out of the gate on top of our bread and butter A320's. Adding further pressure to the business case of whatever Boeing is working on by means of availability and economy of scale/pricing.
 
JayinKitsap
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 7:36 am

Airbus may be facing contract clauses requiring delivery by a date with penalties &/or easy cancellation from there. They have to do the high rate to manage the backlog per contract dates. Technically that works, but if the customers feel abused future orders will be affected.

Lightsaber is right, these higher rates are going to put supply well over demand, reducing prices for any new orders. The total fleet needs about a 5% replacement for a 20 year average life, and a normal growth rate of 5% once supply and demand are in balance. Right now there are several years worth of production in storage, with many of them owned or leased by the airlines with new orders coming in, the financing of all this will be brutal.
 
Rekoff
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 10:56 am

I wonder on what basis people think Airbus is overprojecting production goals two years from now? This will be well into and even past the recovery fase. I'd wager Boeing and Airbus have a better grasp of future customer demand then airnetters, unless you have a crystall ball.

Furthermore I wonder why the focus continues to be on Airbus? Boeing expects to ramp up to 42 by late '22. And that's excluding the remaining MAX backlog that could run into 20+ per month and probably wont be cleared by then. The A320's 64 rate is even a half year later, but the 42-64 p/m ratio looks to point to a more aggressive ramp up from Boeing in light of the 37-63 backlog ratio.
 
mjoelnir
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 11:30 am

Rekoff wrote:
I wonder on what basis people think Airbus is overprojecting production goals two years from now? This will be well into and even past the recovery fase. I'd wager Boeing and Airbus have a better grasp of future customer demand then airnetters, unless you have a crystall ball.

Furthermore I wonder why the focus continues to be on Airbus? Boeing expects to ramp up to 42 by late '22. And that's excluding the remaining MAX backlog that could run into 20+ per month and probably wont be cleared by then. The A320's 64 rate is even a half year later, but the 42-64 p/m ratio looks to point to a more aggressive ramp up from Boeing in light of the 37-63 backlog ratio.


The focus is on Airbus because the majority here is rooting for Boeing. Boeing announcing a rate increase is seen as positive, as seen in one of those threads.

Airbus is a company producing aircraft. The get orders and deliver frames according to contracts. It is not a responsibility of Airbus to keep the market in an equilibrium. If customers want to defer ordered frames or cancel them, that could result in financial penalties for the customers. If Airbus is not delivering frames that are ordered on agreed upon dates, Airbus has to cover financial liabilities.
Customers have to decide if it is financially prudent to cancel and take the hit of loosing pre and progress payments, or take the ordered frames.

It will be unavoidable, that older frames get scrapped at a higher rate. The frames stored still age and are expensive to reenter into service. In many countries those frames are anyway written off, as bookkeeping rules there dictate a fast rate of depreciation. Lufthansa made news a few years ago starting to depreciate frames over 20 years instead of the more usual 12. The value older frames have on the books in the different airlines, will also have an influence on the decision to scrap them or not. I do not know how leasing companies write off their frames.

In the end it is not bad if older fuel inefficient frames leave the fleets.
 
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jfklganyc
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 11:37 am

JayinKitsap wrote:
Airbus may be facing contract clauses requiring delivery by a date with penalties &/or easy cancellation from there. They have to do the high rate to manage the backlog per contract dates. Technically that works, but if the customers feel abused future orders will be affected.

Lightsaber is right, these higher rates are going to put supply well over demand, reducing prices for any new orders. The total fleet needs about a 5% replacement for a 20 year average life, and a normal growth rate of 5% once supply and demand are in balance. Right now there are several years worth of production in storage, with many of them owned or leased by the airlines with new orders coming in, the financing of all this will be brutal.


This is a great point. I know my airline can’t get new planes quick enough and are delaying retirement of older plans.

This can artificially raise production rates for a localized phenomenon.
 
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Revelation
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 2:20 pm

Sokes wrote:
There are lots of old narrowbodies that may carry on or may retire. New tech is not as important as on long ranges.

I think Airbus is fully right to enforce the contracts. If one orders years in advance one gets all the rewards if demand increases.

There is an Indian airline which managed to grow to incredible size. They ordered many years in advance. At times of delivery the price of the plane was much higher. The airline sold the planes to lessors and leased them back. It used the profit from sale to subsidize tickets. Naturally they grew big.

Since early booking airlines get all the rewards in a growing market, they have to take the risk as well.

The manufacturer got rewards during the growing market: selling lots of planes and increasing volume so each plane costs less to produce. Having a huge backlog increases investor confidence which makes it easier to finance their own growth and the airplanes they sell.

The end result may be the leasing market can't recover cost from aging planes and in turn may not take delivery of new planes which hurts the manufacturers. It'd hurt even more if the leasing firms disappear, they serve a vital role in getting aircraft into the hands of smaller airlines that serve places the bigger airlines can't be bothered to serve. A middle ground would be leasing rates for new aircraft increase to cover the losses, but that too throttles growth.

It's more about macro-economics rather than micro-economics. Crushing one element of the system would cause strain on others. Not sure it's going to go down that way. It'll be interesting to watch.
 
MIflyer12
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 2:30 pm

Revelation wrote:
The end result may be the leasing market can't recover cost from aging planes and in turn may not take delivery of new planes which hurts the manufacturers. It'd hurt even more if the leasing firms disappear, they serve a vital role in getting aircraft into the hands of smaller airlines that serve places the bigger airlines can't be bothered to serve. A middle ground would be leasing rates for new aircraft increase to cover the losses, but that too throttles growth.


That's a lucid explanation - and a reasonable concern - but I'll point out that bankruptcy reorganization is a great tool for eliminating debt. Lease rates for old planes and delivery of new planes have some co-dependency but it's not 100%. Some carriers appear not to want to buy used (WN could strike deals for 100+ used 737-700s and -800s next week if it wanted) and don't seem to be tempted by now-lower lease rates on used aircraft. That decision is largely a function of labor productivity in maintenance (and how much a carrier can outsource to Hong Kong, Mexico, etc.), cost of capital, the new vs. old acquisition differential, and fuel cost projections.

Short version: lease companies will still have a market to place new planes, and debt on old aircraft doesn't have to inhibit that.
 
Sokes
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 4:01 pm

Revelation wrote:
It's more about macro-economics rather than micro-economics. Crushing one element of the system would cause strain on others.

For a supply side economist that may be true. But for a demand side economist? believe if people want to fly, somebody will offer flights. If lessors go bankrupt, so be it. It's a high risk, high reward business.
 
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Revelation
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 4:17 pm

Sokes wrote:
Revelation wrote:
It's more about macro-economics rather than micro-economics. Crushing one element of the system would cause strain on others.

For a supply side economist that may be true. But for a demand side economist? believe if people want to fly, somebody will offer flights. If lessors go bankrupt, so be it. It's a high risk, high reward business.

Could be, but it's a very capital intense business with a lot of barriers to new entrants so losing a big financing element that helps new entrants a lot would cause stress on the system. Not everyone wants to fly everywhere or has cost structures that allow them to do so. Something would suffer.

As above a wave of bankruptcies could get debt off the books, but might make future investors dubious about getting involved. I suppose there's a seat for every ass, but sooner or later I can see how we end up with more seats than asses.
 
9Patch
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 7:45 pm

lightsaber wrote:

I love traveling, I want to travel. But my ex's lawyer will focus on the "restrain travel at this time", so for us divorced, it will curtail travel.

Lightsaber

What does travel have to do with divorce?
 
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Revelation
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 8:04 pm

9Patch wrote:
What does travel have to do with divorce?

Connect the dots: the ex will claim the other ex traveled without concern for others and brought weird covid germs back with them, putting the children's health if not life at risk. Divorce is an ugly place to be, especially when children are involved.
 
oldJoe
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 10:00 pm

9Patch wrote:
lightsaber wrote:

I love traveling, I want to travel. But my ex's lawyer will focus on the "restrain travel at this time", so for us divorced, it will curtail travel.

Lightsaber

What does travel have to do with divorce?


I don't know how divorces are handled in the United States. In my country, however, many people have thought about suicide or even practiced it or lived as bums on the street. Depending on the circumstances, you can say goodbye to vacation and traveling (flying) far away for many years ! You will be repurposed. My lover becomes paymaster, which in turn enables the EX and the appendix to fly. So divorce has something to do with travel and aviation
 
9Patch
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 10:01 pm

Revelation wrote:
9Patch wrote:
What does travel have to do with divorce?

Connect the dots: the ex will claim the other ex traveled without concern for others and brought weird covid germs back with them, putting the children's health if not life at risk. Divorce is an ugly place to be, especially when children are involved.

Actually, I thought it might have something to do with children but I didn't know if he has any, or how old they are, or if the divorce was ugly.
So why not just write complete comments that don't require the reader to speculate about such matters? Is that asking too much?

The comment was written two months ago, so hopefully now he's vaccinated, and his children and ex ar vaccinated, and everyone can travel freely.
 
MohawkWeekend
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 10:45 pm

So who is going to take the haircut? Just read the Wikipedia page on the Dr. Peters Group of A380 fame (strange name for us Americans) .Who are the investors in the leasing companies ?
 
9Patch
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Re: The case for more aircraft production cuts/playing chicken

Sun May 30, 2021 11:00 pm

MohawkWeekend wrote:
So who is going to take the haircut? Just read the Wikipedia page on the Dr. Peters Group of A380 fame (strange name for us Americans) .Who are the investors in the leasing companies ?

The only thing the Wikipedia article says about the A380 makes it sound like a successful investment for the Dr. Peters Group:

The Present Investment Focus: Aircraft Funds
Since 2007, the company has been investing in the aircraft field, among others by purchasing aircraft of the type Airbus A380-800. This established the Dr. Peters Group as the pioneer in the field of aircraft investments in Germany which has developed the segment with 17 current aircraft investments into this focus area of investment. Forecast dividends have all been paid until now. The company has become the market leader in Germany with a total placed capital of 1.03 billion euros.
https://en.wikipedia.org/wiki/Dr._Peters
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Mon May 31, 2021 12:25 am

JayinKitsap wrote:
Airbus may be facing contract clauses requiring delivery by a date with penalties &/or easy cancellation from there. They have to do the high rate to manage the backlog per contract dates. Technically that works, but if the customers feel abused future orders will be affected.

Lightsaber is right, these higher rates are going to put supply well over demand, reducing prices for any new orders. The total fleet needs about a 5% replacement for a 20 year average life, and a normal growth rate of 5% once supply and demand are in balance. Right now there are several years worth of production in storage, with many of them owned or leased by the airlines with new orders coming in, the financing of all this will be brutal.

I agree Airbus is likely to be facing contract delivery dates they must force airlines to renegotiate. I don't think Airbus wants to abuse customers, but if production wasn't high enough, customers would exit for free. What Airbus wants is orders deferred for a long contracted production life with enough deliveries to keep up economics of scale and to be ready for the next uptick.

I agree there is a low figure for replacement, I use even longer than 20 year replacement as most aircraft find 2nd and 3rd lives. 25-30 years is more typical. So 3.5% to 4%. Boeing CMO has 3.2% growth in aircraft, 4.0% in traffic and shows how the market was in oversupply. This just means my estimated aircraft needs are slightly below your estimate.
https://www.boeing.com/commercial/marke ... t-outlook/

I am of the opinion that oversupply is an accurate assessment. The figure in the CMO shows in about 2 years we will have air traffic demand sufficient for the prior fleet Yet in the meantime MAX, NEO, A220, and E2 production continues.

Since we had massive scraping, with the DL MD-80s/90s the poster child and future announced retirements (DL as an example again of the CR2, 717, and 767 by YE 2025). We'll also see many older aurcr
https://airwaysmag.com/airlines/delta-a ... 767-300er/

So there is future demand.

Now in 2025 we should have a different discussion.

Aircraft leasing companies will really drive this trend. Why they won't want to miss deals, they need to place their used inventory. The 15% to 25% drop in values of prior generation narrowbody aircraft means placing older examples will be tough:
https://www.fitchratings.com/research/s ... 25-05-2021

In my opinion, the value of 15 year old aircraft dropped so much we will see little resale of 20+ year old aircraft (why pay for maintenance when newer examples are so cheap?). Why pay millions to put sharklets on an older A320 when a newer used plane is a better use of the funds?

Lease revenue is down. Eventually that must slow the industry. Although a good depreciation schedule to net $5 million in profit selling aircraft by aAercap. Overall, Aercap is doing extreamly well (hence buying GECAS).

https://seekingalpha.com/article/442209 ... transcript

ALC is doing about the same (smaller scale):
https://seekingalpha.com/article/442541 ... transcript

Our cash collections and lease utilization rate remains solid in the first quarter at 84% and 99.6% respectively, albeit both slightly lower than what we saw in Q4. To-date, we have agreed to accommodations with approximately 63% of our lessees with deferrals totaling approximately $243 million.


So it will depend on interest rates and demand.

Interesting times ahead.
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Mon May 31, 2021 12:34 am

9Patch wrote:
lightsaber wrote:

I love traveling, I want to travel. But my ex's lawyer will focus on the "restrain travel at this time", so for us divorced, it will curtail travel.

Lightsaber

What does travel have to do with divorce?

Travel for divorced parents. Because one of my children cannot be vaccinated (too young), CDC guidelines require quarantine for the unvaccinated and that opens up a whole bunch of issues.

This allows a parent who wants to control the other parent a major legal avenue as if the child ever gets Covid19...

So with so many divorced...

Lightsaber
 
MohawkWeekend
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Re: The case for more aircraft production cuts/playing chicken

Mon May 31, 2021 1:28 am

So all these off lease aircraft - are the leasing companies doing what banks did in the States after the subprime mark downs? I.e. pretend and extend or delay and pray. Some bank or pension fund somewhere is holding debt on these aircraft sitting in the desert. I can't imagine the depreciation life of an A380 was 12 years (first delivery was in 2007)
.
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Mon May 31, 2021 9:56 pm

MohawkWeekend wrote:
So all these off lease aircraft - are the leasing companies doing what banks did in the States after the subprime mark downs? I.e. pretend and extend or delay and pray. Some bank or pension fund somewhere is holding debt on these aircraft sitting in the desert. I can't imagine the depreciation life of an A380 was 12 years (first delivery was in 2007)
.

Most leasing companies wisely avoided widebodies. There will be consolidation. I don't know which will succeed and which will fail, but I expect many of the undercapitalized to be bought out as proposed:

https://www.nasdaq.com/articles/covid-1 ... -05-25?amp

Of greater concern is in production aircraft. AirAsiaX is a scary default on the A330NEO. AAX owes $12 billion in payments to Airbus.

https://www.thestar.com.my/business/bus ... tructuring

My opinion is the widebody market (Both Boeing and Airbus and the 777x is in a bind) is struggling. This means leasing companies will lose money. However ALC and AerCap overall made a profit. I do not know how much of that was not recognizing losses.

We will have an overhang of used aircraft impacting new sales. e.g. as Allegiant and Breeze intake used aircraft, that will be competition to other airlines. I could see Delta rebuilding their fleet with used aircraft (as demand returns, use the new delivery A220 and A320, but also buy used say 738s).

I personally think production is a bit too high, still.

Lightsaber
 
Jetport
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Re: The case for more aircraft production cuts/playing chicken

Thu Jul 15, 2021 3:47 pm

Not sure this is the best thread for this link, and WSJ likely has paywall. Basically says what we know, Airbus is forcing many customers to take planes even if it risks their relationships and the airlines solvency. Sounds like this is coming straight from Faury.

https://www.wsj.com/articles/airbus-boe ... od=itp_wsj

"But in severe downturns airlines and aircraft leasing companies threatened by bankruptcy expect some flexibility. Airbus has shown little."


"Airbus’s rigid approach carries big risks, and some Airbus executives privately worry it threatens long-term relationships with carriers just as demand starts to return."
 
jeffrey0032j
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Re: The case for more aircraft production cuts/playing chicken

Thu Jul 15, 2021 3:57 pm

Jetport wrote:
Not sure this is the best thread for this link, and WSJ likely has paywall. Basically says what we know, Airbus is forcing many customers to take planes even if it risks their relationships and the airlines solvency. Sounds like this is coming straight from Faury.

https://www.wsj.com/articles/airbus-boe ... od=itp_wsj

"But in severe downturns airlines and aircraft leasing companies threatened by bankruptcy expect some flexibility. Airbus has shown little."


"Airbus’s rigid approach carries big risks, and some Airbus executives privately worry it threatens long-term relationships with carriers just as demand starts to return."


I had mentioned the issue of goodwill that Boeing provided the airlines vs Airbus had during this crisis earlier in this thread (8 months ago), and a short discussion followed. Seems like industry players are starting to feel the effects.

viewtopic.php?f=3&t=1451221&p=22496169&hilit=jeffrey0032j#p22494663

My view is, Airbus is basically becoming the arrogant Boeing back in early 2000s when Boeing supposedly ignored a few new airlines, some of which have large Airbus fleets now.

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Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos