Duong Thu Mai Hoa, states that Vietnam’s market is positive with an increase in GDP growth and an expectation that passenger numbers will continue to grow. In a fascinating panel discussion between Jamie Carter, Cathay Pacific Airlines, Duong Thi Mai Hoa, Vice Chairwoman and Deputy Chief Executive Officer, Bamboo Airlines, and Chen Ke, Chief Financial Officer, Spring Airlines, the 1 st question from the moderator Bertrand Grabowski, gave the panel the chance to comment on profitability within their airlines. Furthermore, he anticipates that airlines will began replacing their 777-300ER assets with the Airbus A350 programme.Īirlines provide insight on plans for further profitability and growth in APAC In contrast, Mark spoke about the successful order book of the A350, which Cirium’s Fleets Analyzer shows 623 aircraft on order. In response Randy spoke about the possibility of a new middle of the market aircraft, a concept that Ascend by Cirium’s Richard Evans has written a full report on. Mark states that production rates for the A320neo are stable and the A321neo is performing well at an order book level, Cirium’s Fleets Analyzer states that there are 2144 A321neos on order. The discussion began by focusing on the opportunity the narrow body presents for the leasing market. In an interesting discussion between the two OEM heavyweights, Randy Tinseth – Boeing and Mark Pearman-Wright – Airbus on their aircraft programmes. George did speculate that the grounding and consequent delayed deliveries may be assisting lessors on one hand, by giving them more time to find new customers to lease the aircraft to, but on the other hand it also reduces the appetite of airlines (especially smaller ones) to sign up to additional/new leases for the type.Īirbus and Boeing confident of future mainstream and widebody market success However, this problem is at the forefront of lessors minds, with MAX lease rates prior to the grounding already being below the 737 NG due to a concentration of deliveries to lessors, leading to pressure on placing these aircraft. Another risk that was highlighted was the potential of weaker 737MAX operators to default on rental payments or go into bankruptcy while the aircraft is still grounded which could lead to distressed sales. For example the FAA may certify in September or October, but the other agencies may take longer if they want to do their own validation, therefore, this could lead to a phased re-entry into service. George said that one of the things that Ascend by Cirium is monitoring is the time it takes to recertify the aircraft by the large regulatory agencies and whether they do it simultaneously or not, which may impact the liquidity of the asset in the near term. In a poll during the ISTAT appraiser panel session including Ascend by Cirium’s Head of Valuations George Dimitroff, together with Angus Mackay, Phil Seymour and John Vitale, the audience gave their thoughts on the 737 MAX grounding with 55% stating they expect it to return to service by the end of 2019. There was little disagreement on this topic although Laurent Delvart did add that oil prices are a variable and more concerning for the LCC market segment than interest rates.Īppraiser panel comments on the 737MAX situation In addition, Anthony Boland comments that fixed interest rates began to rise in 2018, however in 2019 he expects these to remain stable and possibly drop, moreover Anthony believes borrowers should look at interest rates as a total cost. In relation to interest rates, Christine Chang states that low interest rates should continue due to the performance of the US and EU markets. The panel of Laurent Delvart, Managing Director, Head of Asian Group, Credit Agricole and Anthony Boland, Head of Aircraft Finance, Transportation and Logistics Westpac Institutional bank Aviation was in total agreement with Kevin’s comments and Christine Chang, Managing Director, Head of Global, Structured Finance, Asia-Pacific of Citi group supports this theory, adding there was strong liquidity specifically in Asia and that there is an increase in banks investing in aviation assets. Kevin J Whiting, Deputy General Manager, Transportation, SMBC believes there is significant liquidity in Asia and the rest of the world. Cirium’s Fleets Analyzer shows that the OEM had firm orders outstanding for 542 aircraft – 305 C919s and 237 ARJ21-700s – whilst it has already delivered 12 of the latter to two customers – Chengdu Airlines and Genghis Khan Airlines.įinanciers see strong liquidity in the market and expect interest rates to remain stable The opening remarks from Yuerang Zhao, president of COMAC spoke about positive optimism for the Chinese OEM. ISTAT Asia on the 8 th May is turning out to be a success and here are our highlights from the conference so far.
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