Day 2 from Geneva

The second day at the Aircraft Finance and Commercial Aviation Conference in Geneva, Switzerland, covered a lot of ground but the most interesting for our readers is the skepticism over the prospect of re-engining the Boeing 737 and Airbus A320 families.

Potential buyers are anything but convinced this is the way to go. They look at the unknown capital cost, the new costs associated with maintenance, inventory and other factors, and have yet to be convinced that the net-net fuel savings will be sufficiently large to offset the added costs.

It is clear Airbus, Boeing and the engine-makers have a lot of convincing to do. But that’s not all: Airbus and Boeing remain unconvinced this is the correct course to take.

Airbus’s Andy Shankland and Boeing’s Randy Tinseth told the conference, and expanded on their views with us, that there internal  business cases have yet to be made, among other factors, that an RE program makes sense. Although Airbus’ John Leahy told the ISTAT conference last week that he would like to make an announcement at Farnborough, Airbus may not be ready  by then.

3 Comments on “Day 2 from Geneva

  1. I am surprised so much discussion time is being spent on the future of the 737 and the A320. Neither Companies have made any decisions and it seems beneficial for both to stall off a decision for a few years anyway while they sell off their backlog.

    I thought there would be more discussion about Aircraft Financing. That is the grease that enables the planes to be purchased and there have been concerns about the present value of the holdings of some of the Leasing Comanies and their ability to secure financing for their continued participation.

    What is happening in the resale market and the financing for the conversion market. Each of these occupy a place in the “aircraft food chain” and have bearing on the amount of new orders.

  2. I am sure it is a “hot” topic but it is not as significant in the near -medium future as the financial state of Aircraft Financing .

    It is the this area that is the underlying structure of growth ( and even failure) and will impact decision making meaningfully

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