Latam To Cut 787, A350 Orders

KarelXWB · Fri Jun 10, 2016 8:30 pm

It's not just Azul that faces difficult times, economy in Brazil is shrinking and LATAM too needs to cut airplane orders.

Quote:
Latam is reviewing some of the 27 Airbus Group SE A350s going to Sao Paulo-based TAM and 26 Boeing Co. 787 Dreamliners for Chilean arm Lan, which created the group through a takeover of its Brazilian rival. The lease of a further six 787s from Aercap Holdings NV could also be at risk.

“Tam bought the A350 10 years ago and we bought the 787 seven years ago,” Latam Chief Executive Officer Enrique Cueto said in an interview, adding that Latam had expected Brazil’s economy to grow about 4 percent a year, when it’s actually shrinking by that degree.

Source
http://www.bloomberg.com/news/articl...orders-as-brazilian-traffic-slumps

reffado · Fri Jun 10, 2016 8:35 pm

Not good. I wonder if they'll go for delaying deliveries before outright cancelling orders? The lease agreement with Aercap may not survive (I'd think think that would be the first cut to arrive).

Stitch · Fri Jun 10, 2016 8:42 pm

Looking at the 787 firing order, LAN has one 787-9 (LN524 via AerCap) in the near-tern pipeline, so that leaves 16 frames (11 owned and 5 leased), all 787-9, which could be up for cutting.

Not sure what the TAM A350-900 firing order looks like, but I would guess the A350-1000s would be most at risk since nothing has been cut for them and if overcapacity is a concern, they're the largest frames on order.

[Edited 2016-06-10 13:43:28]

KarelXWB · Fri Jun 10, 2016 8:45 pm

Quite odd as they just converted A350-900s into A350-1000s.

Hamlet69 · Fri Jun 10, 2016 9:09 pm

Quoting KarelXWB (Reply 3):
Quite odd as they just converted A350-900s into A350-1000s.

From what I heard through the grapevine (so take it as a rumor until it can be sourced) a part of this conversion was also delaying delivery for a few years.

Sooner787 · Fri Jun 10, 2016 10:03 pm

Quoting Hamlet69 (Reply 4):
From what I heard through the grapevine (so take it as a rumor until it can be sourced) a part of this conversion was also delaying delivery for a few years.

I would also bet LATAM defers some of their remaining 789 orders as well.

jfk777 · Sat Jun 11, 2016 2:30 am

AA would probably be interested in some more 787-9.

Spiderguy252 · Sat Jun 11, 2016 2:34 am

These stories are worrying for the A350 program. One after another airlines - for various reasons - aren't willing to take up their frames. Thai, SriLankan and now LATAM.

TWA772LR · Sat Jun 11, 2016 3:40 am

Could AA, DL, or even UA take up these orders to get earlier delivery slots? I know UA doesn't have the A359 on order, but I can see it making a good 772 replacement, or they can convert them to the A359LR.

hkcanadaexpat · Sat Jun 11, 2016 3:47 am

Quoting Spiderguy252 (Reply 7):
These stories are worrying for the A350 program. One after another airlines - for various reasons - aren't willing to take up their frames. Thai, SriLankan and now LATAM.

You're way overdramatising things. First Thai is taking all their frames as schedule. Second LATAM has already delayed deliveries of their A350s for over a year now with only 3 due in each of the next two years instead of 10+. If they were to delay those 6 frames further, those slots would be taken over in a flash by other operators. As for UL, these frames actually belong to Aercap so the omen is on Aercap to take the frames not Airbus. And we're talking about 3 frames. 3 out of 50+ deliveries this year so i doubt Airbus is losing much sleep over it.

The reason why the A350 has not sold well in China so far is that there are not many (or any!) delivery slots available for the next 5 years. Airbus is certainly not worried about the A350 program. Nor should you.
A

A350 · Sat Jun 11, 2016 9:25 am

Is it possible to "sell" or somehow transfer the order to another airline? Many other airlines might be interesed

RayChuang · Sat Jun 11, 2016 11:49 am

In fact, business analysts are concerned that the slowing economies around the world are starting to hurt sales of the 787 and A350XWB, and in fact have "lowered their guidance" for both Airbus and Boeing as airlines are more willing to spend their money maintaining and upgrading their current fleet than buy new planes. The LATAM cuts for 787 and A350XWB orders reflects this current economic trend.

KarelXWB · Sat Jun 11, 2016 11:59 am

Everyone knew the order trend of the last 5 years could not continue. Too many aircraft have been ordered.

aerorobnz · Sat Jun 11, 2016 12:01 pm

On the wishlist for A350s NZ please.... The 789s would fit too, but A350s are better than 789s comfort wise. Actually I would be surprised if BA/QF/AA didn't take all the 789 slots.

uberflieger · Sat Jun 11, 2016 12:11 pm

Quoting jfk777 (Reply 6):
AA would probably be interested in some more 787-9

AA has already delayed some 789 deliveries.

Stitch · Sat Jun 11, 2016 2:00 pm

Quoting KarelXWB (Reply 12):
Everyone knew the order trend of the last 5 years could not continue. Too many aircraft have been ordered.

And many of these planes were ordered during the period of peak fuel prices. Now that fuel is cheap again, continuing to operate older frames looks more palatable than the capital and maintenance (spares) costs of new frames.

JerseyFlyer · Sat Jun 11, 2016 3:31 pm

Quoting Stitch (Reply 15):
continuing to operate older frames looks more palatable than the capital and maintenance (spares) costs of new frames.

LATAM has some quite recent 767s which would not have been ordered if its 788s had been delivered on schedule.

smi0006 · Sun Jun 12, 2016 8:09 am

Quoting aerorobnz (Reply 13):
A350s are better than 789s comfort wise. Actually I would be surprised if BA/QF/AA didn't take all the 789 slots.

I think QF wouldn't mind bringing some orders forward, or NZ both seem to be in a growth phase.

Could we see NZ replace their 777s with A350s? Lighter (good for trans-Tasman, and Asia) and bit longer legs for IAH and North American.

Motorhussy · Sun Jun 12, 2016 12:31 pm

Quoting smi0006 (Reply 17):
Could we see NZ replace their 777s with A350s? Lighter (good for trans-Tasman, and Asia) and bit longer legs for IAH and North American.

Airbus are actively courting NZ with the A359LR. The -1000 and (mooted) -1100 models would be great 77W replacements eventually.

sunrisevalley · Mon Jun 13, 2016 1:46 am

Quoting smi0006 (Reply 17):
Could we see NZ replace their 777s with A350s? Lighter (good for trans-Tasman, and Asia) and bit longer legs for IAH and North American

NZ don't have a "legs" problem with the 77E. The possibility of some 789's with an increase in premium seating for something about 260 to 270-seats suggests to me that they may be satisfied with something less than the 300 + seat capacity of the 77E / A359.

11725Flyer · Mon Jun 13, 2016 2:09 am

Quoting Stitch (Reply 2):

Looking at the 787 firing order, LAN has one 787-9 (LN524 via AerCap) in the near-tern pipeline, so that leaves 16 frames (11 owned and 5 leased), all 787-9, which could be up for cutting.

Now that Anderson is gone, it's time for Bastian to discard the "experimental airplane" mentality and pick these up to make SEA profitable and perhaps restart flights that need this airframe such as SEA-KIX and restore SEA-HKG to year-round daily. I would also think DL could use the 787 from LAX-SYD (which I don't quite understand why JV partner VA leaves at the same time).

Prost · Mon Jun 13, 2016 2:29 am

Delta has already postponed some 2018 A350 deliveries as well.

KarelXWB · Tue Sep 06, 2016 10:37 am

Some recent backlog changes:

- Deferral of 12 A320neo aircraft deliveries between 2017-2018.
- Cancellation of 12 A320neo aircraft, trimming order book from 67 to 55.
- Deferral of 2 A350 aircraft deliveries in 2017.

raylee67 · Tue Sep 06, 2016 4:55 pm

11725Flyer wrote:
Quoting Stitch (Reply 2):

Now that Anderson is gone, it's time for Bastian to discard the "experimental airplane" mentality and pick these up to make SEA profitable and perhaps restart flights that need this airframe such as SEA-KIX and restore SEA-HKG to year-round daily.

I think Delta's SEA-HKG problem runs deeper than something a 787 can solve though. There is so much traffic between HKG and USA that it is hard to believe Delta is not able to fill a daily 763 or 332. While the SEA route would put Delta on an extreme disadvantage for West Coast traffic, any traffic inland or to East Coast (except for NYC and Chicago) would be level playing field when competing with UA. Delta needs to figure out why it can't fill its planes even with lower prices than UA. If it can't figure that out, once CX decides to make the kill and open HKG-SEA with 359 and utilize on its reputation in Asia and connection opportunities on both ends (AS in SEA), DL would be doomed. A 787 can't do much about that.

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