March 22, 2018, © Leeham Co.: As Boeing enters the final stretch whether to launch the New Midrange Aircraft (NMA, aka 797) market focus should shift to the engines more than the airframe and even the market demand.
It all comes down to this: no engines, no plane.
Monday’s post outlined some of the issues to consider.
But there are larger implications as well.
Special to Leeham News
By Jack Dutton
Jan. 25, 2018, © Airfinance Journal, Dublin: The opacity of the industry in regard to asset prices is one of the main challenges for aircraft lenders and investors, according to a panel of investors speaking at the 20th Annual Global Airfinance Conference in Dublin.
“The lack of transparency on pricing is your biggest challenge as an aircraft lender or holder. The leasing companies were in the best position to hold good pricing information,” said David Andrews, managing partner of transport, Hudson Structured Capital Management.
Special to Leeham News
By Michael Allen
Jan. 25, 2018, © Airfinance Journal, Dublin: “We get asked to value a portfolio of 35-aircraft,” says Rikard de Jounge vice president – asset valuations at Avitas.
“No one tells you that the valuation is for an ABS transaction. They just ask for market and base values,” he adds.
Stuart Hatcher, head of intelligence at IBA Group, says it is still a “secretive market”.
“Providing that we are dealing with sellers, the information is generally good. The issue we tend to find is with the arrangers. And the communication can be quite sporadic,” he says.
The other issue is how much you are including into a valuation for a lease-attached aircraft.
Dec. 22, 2017, © Leeham Co.: Boeing blames a subsidized, price-dumped Bombardier C Series for the poor sales of the smallest member of the 737 family, the -700 and the 7 MAX, but history doesn’t support the claim.
The US Department of Commerce clearly ignored sales evidence that the 737-700 has been “done” for many years and the 737-7 MAX was an unattractive design
that hasn’t been fixed with a redesign; airlines simply don’t want the airplane. Commerce levied tariffs amounting to 292% on C Series imported into the United States in the future.
The US International Trade Commission is currently awaiting post-hearing briefs from Dec. 18 testimony from Boeing, Bombardier, Delta Air Lines and other parties to determine whether Boeing suffered “harm” by the C Series deal with Delta and a near-miss with United Airlines.
If the ITC concludes Boeing suffered harm, the DOC tariffs stand. If not, the DOC action is moot. The loser at ITC is expected to appeal.
Nov. 20, 2017, © Leeham Co.: The Dubai Air Show was a clear win for Boeing, despite the last minute 430 airplane commitment from the Indigo Partners group.
The “MENA” region, for Middle East and North Africa, has been the staple of the Dubai Air Show.
There have been occasional smatterings of peripheral regions tossed in, but commitments from US companies (except lessors doing business worldwide) have not been a regular feature.
Subscription Required Now open to all readers (11/27/17).
Sept. 4, 2017, © Leeham Co.: China, now the world’s second largest economy, appears to be feeling the strains of its long, explosive growth.
The economy is slowing, there are concerns about capital outflow and increased debt by key companies.
HNA Group is one of China’s largest companies and a global investor. Indeed, it’s one of the largest in the world.
Its place in commercial aviation is known among those who are integral parts of the industry, but the depth of its reach may not be well understood.
Due to recent transactions, HNA now is owner of one of the largest aircraft leasing portfolios in the world, with nearly 600 aircraft. Another 253 airplanes are on order.
This includes the acquisition this year of CIT Aerospace, which added more than 300 aircraft to the Avolon portfolio.
Avolon was acquired by HNA in 2015.
However, HNA’s growth means debt, and according to several media reports, the Chinese government is now scrutinizing HNA under a general government “crackdown” on capital leaving the country.
Aug. 21, 2017, © Leeham Co.: Commercial aviation in the Middle East may be having its severe challenges right now, but over the weekend a major step forward took place.
It’s a milestone for both companies.
By Bjorn Fehrm
August 16, 2017, ©. Leeham Co: Air Berlin, Germany’s second largest airline, with 85 destinations, 8,000 employees and 72 aircraft, filed for bankruptcy yesterday.
Aug. 14, 2017, © Leeham Co.: Avolon, one of the world’s largest aircraft lessors following the acquisition of the CIT Aerospace portfolio, believes Boeing will see 2,000 of the 737-10—doubling the internal figure Boeing used to launch the program.
In a new white paper, which Avolon periodically issues, the lessor “projects that the MAX 10 will account for approximately 20% of all 737 MAX family deliveries, which would equate to around 2,000 aircraft. This compares to the A321neo, which is forecast to account for 40% of the A320neo family, with over 4,000 deliveries,” writes Steve Mason, Avolon’s SVP of Strategy.
Mason joined Avolon from CIT acquisition, where he held a similar position and likewise issued periodic white papers.
“The value proposition of the MAX 9 has been impacted by the launch of the MAX 10. It is unclear what role remains for the aircraft, but it is likely to have a limited future,” Mason writes.
Aug. 7, 2017, © Leeham Co.: Amid talk that Middle Eastern airlines, which are the largest group of users for wide-body aircraft, may defer Airbus and Boeing airplanes, there are conflicting signs that the bleak view of the sector isn’t as weak as perceived.
Just last week, two big lessors—Air Lease Corp and AerCap–of widebody airplanes said they are confident in the sector.
AerCap ordered 30 Boeing 787s at the Paris Air Show. ALC has a significant order of Airbus A330neos.
And, the chairman of Emirates Airline said in an interview with the region’s The National newspaper that despite the current challenges at the carrier, it expects to announce an order before the end of the year for either the 787 or the Airbus A350—and possibly the Airbus A380.
Quantities on the former weren’t discussed. Airbus is pitching 20 A380s, according to accounts.
Still, there are a large number of Boeing 777s and Airbus A330s coming off lease in the next few years that could slow orders if these aircraft are offered on the secondary market with low enough lease rates.