Aircraft sales show signs of life after pandemic crisis
The multibillion-pound commercial aircraft buying and selling business has been put on hold during the Covid-19 pandemic. However, a rare public square between Ryanair boss Michael O’Leary and Boeing over orders for Irish airlines’ latest 737 Max 10s shows the high-stakes game is back. to augment.
It’s also a sign that the aviation market is recovering as airlines return to the negotiating table to order airliners in anticipation of more passengers returning.
The pandemic has hit the aviation industry hard. Boeing says the virus has sacrificed two years of growth in the industry. According to industry watchers, the breakdown in negotiations with O’Leary on a new batch of Max 10 jets shows a more confident approach on the part of American manufacturers.
âIt’s a good thing for the industry that Boeing is showing some price discipline. Max is a good plane. Former Airbus commercial director John Lee Hee told the Financial Times.
Boeing assessed Ryanair’s affairs, but only stressed that it needed to be disciplined and was modest in its disagreement with O’Leary. The large new orders from Max are said to have boosted the US group as they continued to build confidence in the plane after two fatal crashes.
The company won a series of orders this year, including 150 for the United Airlines Max 10. According to Market Watchers, it also reduced the backlog of Maxjet, which was manufactured but had no buyers, to around dozens.
âFor about a year now, Boeing has offered affordable pricing to Max’s friends and family to help clear Max’s backlog. All existing buyers have bought more. Said Rob Stallard, analyst at Vertical Research Partners.
The recovery in traffic is speckled throughout the industry, but airlines are returning to orders for new planes.
Data from aviation consultancy Ascend by Cirium shows 902 new gross orders, excluding cancellations and orders from non-profit customers, recorded so far this year by Airbus and Boeing. That is compared to 672 orders in 2020. North American airlines, particularly United Airlines and Southwest Airlines, have dominated rates this year.
âYou can see the clear impact of the US majors’ Max orders [airlines]”” said Rob Morris, Consulting Manager for Ascend by Cirium.
However, the actual delivery will be much less. During the same period, only 572 devices were delivered.
Boeing chief strategy officer Mark Allen said the company’s sales team was in talks with “many customers around the world.”
âWe see the demand from different regions. Many airlines recognize this as an opportunity to reset their plans and the intent of their fleet. “
DÃ³mhnal Slattery, CEO of Irish aircraft leasing company Avolon, said recent orders from US airlines, especially in the past six months, are a positive sign. “It sends a message of confidence in the market recovery and also a message of confidence in Max.”
Airbus, another major aircraft manufacturer in the world, recorded the highest month of aircraft orders in August since the outbreak of the Covid-19 pandemic in January 2020.
European companies are lagging behind Boeing in this year’s order flow as their American competitors replenished their biggest order backlog in August, including a major deal between Delta and British low-cost carrier Jet2. Reported 102 total orders to. British airlines’ orders for 36 A321neo jets were considered a stunt from Air Airbus as they were traditionally purchased from Boeing.
The boss of the airline is also clearly confident. Delta Air Lines CEO Ed Bastian told the investor conference that the crisis “also created opportunities.”
âThey not only retired many old inefficient aircraft, but also acquired many new aircraft, but also gave us a great opportunity to accelerate the development of our fleet. Not [Airbus] Like 321neos, I’m not afraid to go into the used market. He’s not afraid to take advantage of the incredible bargains that will be available as capital-friendly decisions for years to come, âhe said.
Southwest Airlines’ next CEO Robert Jordan aims to restore the network after the pandemic at the same meeting, so 2022 is expected to be a “year of strong growth from a pure new aircraft perspective.” He said he was.
Aircraft carriers have started to consider renewing their fleets, noting that confidence has strengthened during the sustained summer, even in Europe, where the recovery is slower than in the United States, executives said. Of the industry.
O’Leary, known to be bullish, is particularly bright despite the failure of negotiations with Boeing. He told investors on Thursday that the new fleet of Boeing airlines would contribute to a gradual shift in growth. Ryanair expects to carry more passengers than expected by March 2026.
However, the resumption of air traffic is timid. Last week, some of the largest U.S. airlines blamed the increase in cases of infectious delta variants of the coronavirus, revealing slowing demand.
Avolon’s Slattery also warns globally that “it will take us at least two more years to feel that we are really overcoming the worst.”
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