Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
Paris Air Show Day 1
UBS has this easy-to-read Table of the orders and commitments announced on Day 1 of the Paris Air Show:
The big news, of course, is the launch of the Embraer E-175/190/195 “E2” (second generation). The press release is here.
Embraer Rendering
Airbus scored an unexpected order for the A380: 20 from specialty lessor Doric Leasing, which has financed a number of A380s. We think this is an odd deal, and it must be one that already has some A380 customers lined up.
Tomorrow is expected to be the day Boeing launches the 787-10, so it should be Boeing’s day. We also believe tomorrow will be the day Airbus does a fly by of the A350 XWB. A little tit-for-tat, perhaps.
Chandler said they need a second flight before going to Paris. I would expect something closer to the weekend… I could wrong of course!
Doric has been very keen on the A380 as an investment. They also said that they see big demand for them, meaning 20 is not enough… Interesting announcement however, not an order yet.
“Tomorrow is expected to be the day of Boeing”
Not with John Leahy being in town… even if he is not the CEO (the only thing i agree on with Howie).
Isn’t the Doric Leasing ‘order’ just a MoU? Not all MoUs turn into firm orders, many do, but many don’t.
Doric’s first plane is due for delivery in 2016. Virgin differed their 380’s to 2016 I think too. So maybe VS will be their first contract?
Of course the word is deferred. I did get an education.
I wonder if Doric has VS or IT’s slots. Obviously IT isn’t going to be taking any planes soon (if ever), much less the A380. IMHO VS will convert their A380’s to -1000XWB’s.
Will be itneresting to see what happens with A380 sales/leases once A380’s become availble on the seconary market.
Embraer looks like they will do very well with their new version of the e-jets. Confusing thing, though, to create two new sizes but give the same designations as the existing E175 and E195
1st picture is not showing up (the UBS one)
I mentioned on an old thread that SIA and Emirates will be putting their early frames on the market in the next 3-4 years if they run to form.
I really expect Delta to be a buyer of some of these with EA or RR engines as the likely seperator depending on Delta’s preference.
I wonder if these 20 A380s are part of Leahy’s targeted 25 orders this year.
Good question, especially if it turns out to be true what some over on a.net speculate, namely that individual frames will be firmed up as Doric places them with customers.
It is also possible to look at the Doric order in another way. There are probably quite a few airlines that feel they can make a A380 work but are not confident to make the full financial commitment or take a long term lease of 10-15 years. Perhaps you can see this as a strategic partnership between Airbus and Doric to offer airlines a kind of “try before you buy” approach.
Perhaps an airline could lease 5 A380’s for 3-5 years as a way of testing their business assumptions. This approach to risk reduction may be quite an interesting step if my hypothesis is correct.
I had seen it as a positive for the A380 program in that after some airlines did lease it, they would be convinced of buying some of their own.
Unfortunately what you suggest is a mixed message. If it is as you suspect, it does sound like a clever tactic but it also suggests that Airbus is getting desperate for movement (orders) on the A380.
I do think they are worried about momentum of sales. If they lose momentum on orders, he market will have more and more doubts and that becomes a vicious cycle. a lot of airlines are much more about risk mitigation then they are about growth oppportunities.
Airbus must tunnel the Schottky barrier like wall of FUD Boeing has errected around VLA.
If they can achieve that with footdipping samples by way of Doric Leasing …
hi. couldn’t pull up the UBS chart. can anyone provide help on how to save it so I can see the table?
The chart has been re-loaded into the post and should be available now. Click on it to enlarge.
This site provide a neat overview as well:
http://www.pdxlight.com/pas13.htm
I’ll be very, very surprised if Doric did not already have some customers down before placing this order, it would be strange.
I think they know where they’re going with this.
“Lapidus said that based on the list of potential A380 leasing customers, he expects all 20 jetliners to be placed through lease transactions with probably two or three airlines. “This is why I think we may not have enough with our current agreement,” he added.”
http://www.airbus.com/no_cache/newsevents/news-events-single/detail/doric-wows-the-international-press-with-its-agreement-for-20-a380s/
They seem very confident given how they’ve already talk about how many airlines they intend to place them with and that they feel 20 is not enough. I’m pretty certain that they’re in contact with those airlines for them to go ahead with such a big order. Remember, this would be the single biggest A380 order leaving aside the Emirates ones.
I think Doric will only firm up those positions that are real sales I would assume? They might have 20 positions and now need to find customers for each and not have a deal that says buy the first 5 and you buy all 20. It’s a good approach because now Airbus has someone with a different type of incentive offering frames. Maybe Doric’s incentive might allow them to take on a level of risk that Airbus migh be able to provide. In addtion, if Doric gets a ten year lease and they can get annual payments covering the cost of the frame over the first 8 years, and make a profit the last two they can write the frame off in the tenth year. No secondary market at that point, and there is no food chain pain. ILFC was not able to make that business case work, while Doric seems comfortable. I wonder why.