Tuesday, 20 March 2012

Aer Lingus & Ryanair new aircraft orders ©

The prospects of Aer Lingus and Ryanair securing very attractive new aircraft  pricing in the next 18-24 months have improved considerably as cracks begin to appear in the current aircraft order cycle as industry pressures begin to mount, it will be interesting to see will the carriers be able to secure similar deals to those after 9/11 when both carriers placed orders enabling them to widen the unit cost differential with competitors can they repeat the trick again?

The factors: 1)  American Airlines is likely to consolidate post Chapter 11 process & on-going consolidation in US Airline industry 2)  Lufthansa considers freezing capacity (2011 Annual Report) 3)  A recent S&P report on the European airline sector highlighted GDP/Fuel issues 4) IATA warns airlines face bankruptcy if fuel costs rise from $120 to $150 per barrel particularly in Europe 5) Industry analysts have warned of a bubble with the existing aircraft order backlog due long-lead times 6) Airbus is concerned with the state of the Indian Airline market (Long-term prospects good) 7) ILFC lease rates under pressure 9) Airbus and Boeing some orders on the books are 'paper orders' ISTAT12 10) AerCap CEO Aengus Kelly ‘Clearly there is a vast amount of over-ordering’ (WSJ 23rd February 2012) 8) Significant re-structuring of EU short-haul market

Aer Lingus and Ryanair are ideally  placed to seize new aircraft order opportunities as they arise in the next 18-24 months as both carriers are profitable and growing unit cost differential with competitors with robust balance sheets.
                                      A fuel-efficient engine option for Airbus' A320 Family

                                                      New Boeing 737 MAX


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