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Introduction

April 28, 2015, c. Leeham Co. Goldman Sachs over the weekend issued a research note, Is the new aircraft supply/demand equation nearing a tipping point?

GS cited the recent United and American airlines actions involving the Boeing 787 and Boeing 777 and other fleet activity or inactivity at Lufthansa Airlines and Virgin Atlantic as harbingers for its thesis.

Goldman has a Sell rating on Boeing stock, based on its belief the demand is leveling off and announced production rate increases by Airbus and Boeing will lead to oversupply.

Summary

• Goldman sees recent fleet actions indicating a softness in demand, driven in part by lower fuel prices.
• United, Lufthansa actions delaying retirement of older aircraft cited.
• Virgin Atlantic decision on Boeing 747 replacements delayed, says Goldman.
• We see other reasons for the above and no meaningful impact.
• Key wide- and narrow-body campaigns pending.