The countdown is underway for the outstanding order of 10 Airbus A380s by mega-lessor International Lease Finance Corp.
ILFC was an early customer for the super-jumbo jet and suffered two year delays along with the other customers when Airbus’ industrial production issues arose for the giant aircraft. As part of the restructured contract for the order as a result of the delays, ILFC obtained the option to cancel the orders in 2010.
ILFC CEO Steven Udvar-Hazy told us at the ISTAT conference this week that come January 1, he can exercise that option.
We asked Hazy if he would. The rationale for our question is that at current list prices, th 10 orders represent a commitment of at least $3bn for an aircraft that suddenly is less in demand as global traffic takesa dive. Furthermore, given ILFC’s peculiar position of being captive to a parent on its death bed and looking for a White Knight, wouldn’t it be better for ILFC to be relieved of this obligation?
Hazy, cagey as ever, said ask him on January 1. While seemingly hinting that he already made up his mind, he added that the situation isn’t as “simple” as merely canceling the order. Rather, there could be other aspects to the transaction.
He did not elaborate, but from our perch of 30 years being involved in commercial aviation, the A380 orders could well be involved in a swap for orders for another Airbus type or some other transaction.
Hazy hopes ILFC will be sold this year. Disposing of the A380 order entirely, or in favor of more in-demand airplanes, would certainly be an attractive aspect for any prospective buyer.