By Vincent Valery
Dec. 7, 2020, © Leeham News: Since the beginning of the COVID-19 outbreak, numerous carriers have either ceased operations or gone into court-supervised restructurings. Among those undergoing restructurings are the world’s two largest low-cost long-haul airlines, AirAsia X and Norwegian Air Shuttle.
Both carriers were in a precarious financial condition before the pandemic. Their troubles contrast with the financial solidity of some major low-cost airlines, including Ryanair and Wizz Air.
IAG closed its Level base in Paris Orly, while Lufthansa ceased SunExpress Deutschland’s operations. NokScoot, a joint venture between Singapore Airlines and Nok Air, also ceased operations after years of losses.
Before the COVID-19 outbreak, Primera Air ceased operations in 2018. Wow Air and XL Airways folded in 2019. Along with AirAsia X’s and Norwegian’s financial struggles, this raises questions about the viability of the low-cost long-haul business model.
LNA looks at the sequence of events that led to four major carriers’ failure and the viability of their business models.
By Judson Rollins
Dec. 16, 2019, © Leeham News: AirAsia and long-haul sister AirAsia X have been growing at world-leading rates for much of the past two decades. AirAsia’s fleet growth in the 2000s was so rapid that it quickly became a top customer of Airbus’s A320 program; the airline is now second only to India’s IndiGo as an A320neo customer.
However, neither of the airlines nor their joint venture partners across Asia are producing solid financial returns–making it questionable whether they can economically fly all the aircraft they have on order.
Sept. 4, 2019, © Leeham News: Airbus’ decision a few months ago to keep the A350 production rate at 10/mo appears to be a wise one, considering that there is a small production gap in 2022 but increasingly large ones from 2023.
Boeing boosted rates this year of the 787, which competes with the A350-900 but not the -1000, to 14/mo. Boeing is sold out at this rate in 2020 and 2021, but has a big gap in 2022 and larger gaps thereafter.
Both companies bank on a splurge of orders early next decade to fill the production gaps. Each says there will be a retirement surge beginning in about 2022.
Airbus offers the A330neo and A350. Boeing pitches the 787 and 777X—with a combined production capacity of 35/mo or 389/yr at current rates.
Oct. 4, 2018, © Leeham News: The huge surge of orders for the Airbus A320 family far outstrips the aging aircraft statistics, an analysis shows.
Airbus has a backlog of more than 6,000 A320 family members, with more than 1,700 sales potential just for retirements.
There are more than 4,300 A320s scheduled for delivery from 2019 through 2025.
There are just 765 A320s that hit 25 years old during the same period.
The surge in A320-family aging aircraft begins in 2030, just as the bulk of the current backlog ends, according to data bases maintained by Ascend and Airfinance Journal’s Fleet Tracker.
By Dan Catchpole
July 26, 2018, © Leeham News: Airbus posted strong earnings for the year’s second quarter, thanks to better profitability on its A350 and A320 programs. Investors rewarded the news by pushing Airbus share prices to a 52-week high Thursday morning.
However, Airbus lowered its earnings for the full year due to its takeover of Bombardier’s troubled C Series program, since renamed the A220. Airbus plans to deliver 18 of the single-aisle jetliners this year.
July 19, 2018, (c) Airfinance Journal: Announcements at today’s show followed the same pattern as earlier in the week a fair amount of undisclosed orders. The first three days of the air show saw 292 aircraft orders undisclosed.
Of today’s total, undisclosed orders represented 125 Airbus and Boeing aircraft, while AirAsia X, Hawaiian Airlines, Vietjet and lessor Novus Aviation Capital announced commitments for 108 aircraft.
April 24, 2018, © Leeham News: AirAsia India is a newcomer to the Indian commercial aviation scene.
It began service in 2014 and, at Dec. 31, served just 17 cities with 14 Airbus A320s.
It had a 4.5% market share by the end of last year.
AirAsia Berhad holds a 49% stake in the airline. India’s Tata Sons holds 49% and the balance is held by Indian nationals which ties to Tata.
The AirAsia entities are tied to the AirAsia Group of Malaysia, the largest low-cost carrier in Southeast Asia.
Bangalore is AirAsia India’s headquarters.
April 17, 2017, © Leeham Co.: A shift is underway among Asian airlines that could have ramifications for the airframe and engine manufacturers and, by extension, their suppliers.
It doesn’t appear, however, that aerospace analysts in the US and Europe realize this shift. At least none has written about it that we’ve seen among the research notes we receive.
By Bjorn Fehrm
March 1, 2017, ©. Leeham Co: AirAsia X, the long haul sister of Tony Fernandes’ AirAsia, finally turned a profit during 2016. The airline, which started operation in 2007, had a bumpy ride from the start.
After scaling back operations in 2012 and focusing the fleet on the more economical A330-300, the business gradually turned. The low fuel prices of 2015-2016 finally brought the airline profitability for the last fiscal year. Read more