No cookie cutter formula for fleet restructuring
A CAPA consultancy report has forecast permanent changes to the Asia-Pacific airline fleet that include scores of grounded large aircraft being consigned to the airline scrap heap. Read More »
Will these aircraft be replaced, at least in part, with dozens of new technology 787s, 777Xs and A350s? Dr Johannes Bussmann, chairman of MRO market leader, Lufthansa Technik, holds this view: the prediction of a tsunami of older aircraft flooding the for sale market has not, as yet, come to pass. Could airlines be deciding to keep their older jets flying for a little longer than recent airline analysis has predicted?
Most Asian carriers are swimming in a sea of debt. They face years of repaying the huge loans they have had to negotiate to support minimum route networks. How many of these carriers can splash out billions of dollars for a major fleet upgrade in such straightened circumstances?
Few carriers in the region have entered bankruptcy or been forced to close, although several airlines have, or are going through, administration. Among them are Garuda Indonesia, Philippine Airlines and Thai Airways International. But Asia-Pacific carriers are struggling.
An exception is the Qantas Group if its fleet planning is an indication of its financial acuity. Last December, it selected Airbus planes to replace its narrow-body fleet. It can afford to fund the purchase of 134 aircraft from the A320neo and A220 families. The combined deal is for 40 firm orders and 94 purchase rights.
At Asian airlines, a continuation of past fleet management practices is the most likely outcome for post-pandemic route restructuring. Airlines will operate a mixture of new and older, although not ancient, aircraft. A market totally dominated by new commercial jets is difficult to envision in an environment where schedules are in rubble and inconsistency in quarantine and vaccination rules between countries is stalling market recovery. Dr. Bussmann has a point.
So, like every other set of airline operating circumstances brought on by the pandemic, strategies for fleet renewal going forward remain uncertain.
Associate editor and chief correspondent
Orient Aviation Media Group