|Quoting EPA001 (Reply 20):|
Even though they call the order speculative at this time, they must feel confident about the progress of their talks with potential customers. Otherwise they would not have firmed up the commitments they agreed on with Airbus in 2013.
|Quoting par13del (Reply 28):|
I still think the question is valid, what's the catch? As another poster mentioned, this is a multi-billion order, that's some risk to take.
|Quoting Flying-Tiger (Reply 55):|
Don´t forget: the private market is currently flush with money and is looking for safe heaven investments with proper returns. Large assets seem to be a good market at the moment - and attracting enough investors seems possible.
There is certainly a risk associated with this order, but I think that Doric has at least part of the pipeline already blocked with clients, and thinks that the risk they are taking is managable. Same goes for Airbus - they are certaily not interested in a non-performing large client.
I would think that from the great distance of a.net, the only attitude to take is that A have sold 20 units to Amedeo via a proper contract.
I also take on board the good point made by Stitch above that the other big Leasing firms routinely place "speculative" orders with the OEMs for big numbers of planes for reasons of securing delivery/securing a good price/whatever.
But I also consider that it's not quite so simple as all that:
For a Leasing firm to place "speculative" orders for A320/737s is really ho-hum. Barely any risk at all.
Placing orders for A350/787 would be a greater risk in that neither has yet reached the level of operational reliability/customer satisfaction enjoyed by the narrowbodies.
Also the units are far pricier ... greater reward=greater risk!
To start with, the A380, of course, has a great record already with the flying public and with EK
At least some of the other majors, however, seem to have experienced problems with integrating the big beasts into year-round schedules which actually make money for their owners.
And these heavier-than-air machines are very big and cost a lot of money, both to buy and then to fly.
And there is, at the time of writing, no resale market at all, and no A380F conversion available.
So the risk to a Leasing firm of a "speculative" order for A380s would have to be at a greater level again, IMHO.
The greatest threat that I can see is that Amedeo may have made a substantial mistake by declaring to the world that the order is "speculative"; I think that this is a very unsound thing for Amedeo to have done.
Let's picture a possible scenario:
At some future time, Amedeo unfortunately finds itself under time-pressure to perform on it's Contract to A.
Furthermore, it now finds that the airline CEO sitting across the negotiating table is a really tough bargainer - say like a M O'Leary, for argument's sake.
The tough bargainer has of course come fully armed with the knowledge that Amedeo is under time-pressure and has no other competing buyer.
In such a scenario, I would predict a very painful negotiation for Amedeo, with all the profit-margin being transferred straight from A to M O'Leary.
Or even worse than that.
Probably wrong - if Doric/Amedeo/whoever are as successful as it seems they are, then maybe I'm making too much of it.
But declaring the order to be "speculative" still remains a very strange thing to have done, IMO.