By Bjorn Fehrm
July 13, 2016, ©. Leeham Co, Farnborough Air Show: AirAsia Group Chief Executive Tony Fernandes said yesterday that increased congestion the group has seen for several of the airports AirAsia operates to in the Asian market motivated an order for 100 Airbus A321neos.
“We are slot constrained on several of our destinations and when we can’t get any more slots from an airport, it’s better to take-off with the 50 more passengers that an A321neo offers rather than the 180 seat our standard A320 have,” said Fernandes.
“The congestion has grown to the point where it will no longer be optimal for AirAsia to only operate with our standard-size aircraft, our fleet of 200 A320ceos with 180 seats, which will be gradually replaced in coming years by our order for 304 A320neos with the same seating,” Fernandes said. Read more
May 23, 2016, © Leeham Co.: Malaysia Airlines MH370. Air Asia 8501. Egyptair 804.
Three passenger flights lost over the oceans. One, MH370, remains undiscovered to this day. Air Asia took a couple of weeks to locate. Egyptair debris took about 36 hours. The black boxes are still missing from MH370. Once the Air Asia wreckage was discovered, the boxes were recovered fairly quickly. According to media reports, the black boxes of 804 have been “generally” located, but Egypt has dispatched a submarine to more precisely locate them.
The absence of real-time data transmission from the Flight Data Recorders contributed to the mysteries of what happened to these aircraft and spurred wild theories and conspiracies. ACARS, which does transmit data from airborne aircraft, does so at intervals–not real-time. Real-time data streaming from on board transmissions could provide immediate answers to what happened to an airliner.
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Introduction
August 24, 2015, © Leeham Co. When airlines like Indigo of India, Air Asia, Norwegian Air Shuttle (NAS) and Lion Air have outstanding orders for Airbus A320s and Boeing 737s that number in the hundreds, far more than operations and growth appears ready to support, the deals raises the natural question: What are they thinking?
As LNC’s Bjorn Fehrm explained Friday, one aspect of these big orders is to “flip” the aircraft every six or seven years, a time that roughly coincides with the maintenance holiday/warranty period. Sale/leasebacks are used to finance these huge purchases.
The practice is hardly new. The USA’s JetBlue Airlines, Ryanair and others practiced this flip for years.
Carriers like the new LCCs mentioned above not only plan to do so to avoid major maintenance costs, but also to fuel their growth. In the case of Lion Air and NAS, these companies also plan to lease out aircraft to other airlines.
But there remain risks involved for the companies and for the industry.
Summary
21 August 2015, ©. Leeham Co: IndiGo Airlines firmed up Airbus’ largest aircraft sale by unit numbers in the week. The order is for 250 A320neos. This means the airline goes from 180 A320neos on order to 430. The airline is just finishing off its first order with Airbus for 100 A320ceos, the final eight being delivered over the next months.
How can an airline that did not exist 10 years ago order 430 A320neos?
There are a couple of things that makes this possible, one of them being the Sale/Leaseback. Before we go to Sale/Leaseback and how this enables this magnitude of business, let’s take a quick look at IndiGo. It has certain similarities to other airlines that also close large aircraft deals.
AirAsia: Group CEO Tony Fernandes made appearances on international news programs, providing his first interviews away from the direct events surrounding Flight 8501’s crash. Here is a transcript of his interview on Bloomberg News.
The interviews come as the first read-outs of the cockpit voice recorder and flight data recorder have been undertaken. Indonesian officials are quoted as saying the alarms overheard on the CVR were “screaming,” a description which has been criticized by some, who point out correctly that alarms don’t “scream.” This is certainly true, but we take a more charitable view about the term. This could be a reflection of English being a second language to the government officials and merely a translation issue.
Regardless, the data seems to confirm early reports that the flight was caught in massive up- and downdrafts that threw the airplane into a stall and out of control. Former NTSB crash investigator told us he believes the airplane went into a tight descending spiral and broke apart when it hit the water.
Philippine Air, Russia deferrals: PAL deferred 38 Airbus narrow- and widebody aircraft, according to this news report. Boeing is in talks to defer deliveries to Russian airlines, according to Bloomberg.