Pontifications: Good A220 endorsement, but Airbus still has cleaning up to do

By Scott Hamilton

Aug. 5, 2019, © Leeham News: Airbus last week won a big, validating commitment from Air France-KLM Group for 60 orders and more options for the A220-300.

The contract won’t be firm until later this year, but the AF Memorandum of Understanding (when converted) brings the A220 order book to 611. There are some other commitments that haven’t yet been converted to orders.

Through mid-July, there were 86 A220s in service. There were 465 Letters of Intent, MOUs and Options before the Air France deal was announced.

But of those firm orders, 110 of them aren’t so firm. In fact, some of them really shouldn’t even be on the books.

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Lessors, airlines seek 1 year lease extensions in MAX groundings

June 26, 2019, © Leeham News: Airlines and lessors are making plans to extend leases by up to one year as the Boeing 737 MAX grounding drags on with no end in sight and carriers scramble to cover their routes, LNA is told.

Shortly after the MAX was grounded, on March 13, airlines began extending leases on airplanes that were to be replaced by the MAX up to six months.

This was until the September-October timeframe.

Now, with estimates that the Federal Aviation Administration may not be ready to lift its grounding order until then—and other regulators may come later—airlines see a need for another lease extension.

Lessors are not interested in another six month extension, however, LNA is told.

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Paris Air Show, Day 4: Closing orders, commitments

June 20, 2019, © Airfinance Journal: By day four of the Paris Air Show, most of the OEMs had already wrapped up their deal-making, but there was still time for Airbus to tempt another two airlines and another lessor towards the A321XLR and the A220-300 products.

Airbus and CFM are the manufacturers that will leave Paris the happiest, although ATR was keen to make its case, citing 75 “new orders” at the show. However, in line with the odd phrasing employed by most marketing departments this week, it was difficult to discern what those “orders” meant. ATR said they included “35 firm orders from NAC disclosed on June 18”, but its press release about that deal described only a “letter of intent for 35 firm ATR -600s, with options for a further 35 and purchase rights for another 35.”

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Airbus launches long-expected A321XLR with ALC order; lessor also orders A220-300

By Judson Rollins

June 17, 2019, © Leeham News, Paris: Airbus launched its much-awaited A321XLR today with an initial order of 27 airplanes from lessor Air Lease Corp. ALC also ordered another 23 A321neos, which can optionally be taken as A321LRs. This brings ALC’s total Airbus order count to 387, making it Airbus’s third largest lessor.

Airbus also announced that ALC has ordered 50 A220-300s to be delivered between 2021 and 2026. ALC is the largest lessor to date to order the former C-Series aircraft. ALC executive chairman Steven Udvar-Hazy said, “We believe this aircraft will be a wonderful replacement for aging A319s, 737s, Fokker 100, BAe-146s, and other smaller jet aircraft.”

 The order is structured as a letter of intent. ALC chief executive John Plueger said the LoI covers “all commercial business points” but that it will be converted to a firm order once certain terms are firmed on the A220 portion of the order.

Airbus Chief Commercial Officer Christian Scherer declined to discuss catalog pricing for the A321XLR.

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2019 Outlook: COMAC’s slow but steady progress

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Introduction

Jan. 4, 2019, © Leeham News: This is not the year where China’s COMAC will have break-out progress for the C919, its challenge to the Airbus A320 and Boeing 737.

Flight testing is slow and entry into service (EIS) is now targeted for 2021—a slip of five years from the original schedule.

The C919 launch-to-EIS is approaching the eight years record of the ARJ21.

But these delays don’t mean COMAC isn’t making progress.

Summary
  • Boeing’s JV with COMAC for a 737 completion center opened last month.
  • Despite delays, the C919 progresses.
  • Progress continues on the JV with Russia for the CR929.

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KKR invests $1bn in small lessor

Jan. 3, 2019, © Leeham News: The US private equity fund KKR agreed to invest $1bn in boutique lessor Altavair, a deal that includes taking a 50% stake in the company.

KKR may supplement the investment with additional commitments, the companies said.

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Pontifications: Nordic quietly rises to #4 world lessor

By Scott Hamilton

Dec. 10, 2018, © Leeham News: In the world of commercial aviation, GECAS, Avolon, AerCap, Air Lease Corp and BOC Aviation are among the most recognizable names of lessors.

These companies make headlines with large orders of Airbus and Boeing aircraft. Air Lease is headed by Steven Udvar-Hazy and John Plueger, giants of the aircraft leasing business.

But one lessor quietly, below the radar, has become one of the largest lessors in terms of aircraft count pursuing regional aircraft, a product mostly shunned by the biggest lessors.

Nordic Aviation Capital Embraer E190-E2. Source: Nordic.

Nordic Aviation Capital last year ranked tied for fifth with asset manager BBAM, each with 404 airplanes in their portfolios, according to an Airfinance Journal 2017 survey. GECAS, AerCap, Avolon and SMBC Aviation Capital were bigger.

DAE Capital of Dubai, BOC Aviation, Air Lease Corp and Aviation Capital Group rounded out the top 10. Read more

Is Long-Haul LCC viable? Part 2

By Bjorn Fehrm

April 04, 2018, © Leeham News.: In the first article about Long-Haul LCC and if it’s a viable business, we looked at ticket pricing strategy used by airlines to maximize revenue on a route. Now we look at the cost side of the equation.

The cost level for a Long-Haul LCC is of utmost importance.  A lower cost level than the Legacy carriers flying the same routes is the only way the company can compete. It’s seldom it offers origins or destinations not offered by other airlines. Its mission is to offer a popular air transport service at a lower cost.

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Focus on NMA engines: all OEMs vying for Boeing’s approval

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Now open to all readers.
Introduction

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.

Summary
  • Market sources are tossing about various scenarios about the future GE Aviation and CFM.
  • Rolls-Royce won’t have its Trent 1000 problems fixed until 2021 or 2022, at great cost.
  • Pratt & Whitney won’t have its Geared Turbo Fan final PIP packages for its problems sorted out until around 2021.
  • Resources—both financial and with engineering—are stretched now.
  • Sequencing current engine problems, and in the case, GE’s GE9X, are a factor, in the eyes of some.

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Lessors and investors disagree on transparency

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.

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