Page 6 - AAA MAY - JUNE 2018 Online Magazine

for 2018 and that the engine company says
that these issues should now be behind
the engine and that all expected deliveries
should be completed this year.
However, those issues have impacted
Airbus, which despite its huge lead over
the 737MAX has only delivered 318 neos
compared to 139 737MAX airplanes as of
May 30. Aside from the Southwest Airlines
engine issue and resulting inspections CFM’s
LEAP engine has been experiencing delays
of about five weeks. According to Bernstein
“there have been a few issues that have
led to engine removals (peeling of shroud
coating, quality issues on disks with risk of which is already yielding cash-positive results on every sale
cracking). But, the main reason for delays, and delivery – this gives Boeing far more room to maneuver its
according to CFM, is simply getting suppliers pricing structure and as we’ve seen in a number of campaigns
to ramp up production.” thus far in 2018.”
CFM plans to deliver more than 1100 “Orders from Emirates, American, Hawaiian, Turkish, Qantas
engines in 2018, says Bernstein, which should and others proves that the 787 maturation is in full swing,” said
meet the needs at Boeing and Airbus. While Ahmad. He suggests that “we’re almost certain to see additional
most analysts say all the engine issues will 787 orders from both lessors as well as a number of Chinese
be solved, some are questioning the pace of airlines – particularly as traffic growth in China leads the charge
technology upgrades and if they will impact behind many carriers expanding from Asian-centric route net-
the engine offerings for Boeing’s proposed works to ambitiously grow into new markets that could not have
797. been effectively served or launched had it not been for the

In the Orderbook overwhelming economics that the 787 family extols.”
Industry sources also suggest that United is likely to order a
he headline grabbing aspect of air- batch of 787s possibly -8s and Emirates will make a splash with
shows are the orders and with lower a sign off of its 787-10 order announced at the Dubai Air Show
than usual order flow leading up to last year. Ahmed also sees commitments from British Airways
TFarnborough, it raises the question for additional 787-10s and a number of 777-9s with a view to
are more than the normal number of orders firming that deal up before the year ends.”
being saved for the airshow or is it a softer He likes the 777X prospects now that production is in full
market. Up to the end of May according to swing with the first airplane to fly early next year. Ahmed also
analysts Seeking Alpha, Airbus had received sees Saudia as a customer along with more Asian airlines.
50 cancellations in the first 5 months, leav- Another high-flyer for Boeing suggests Ahmed is the 737MAX.
ing the jet maker with 111 net orders. Boeing He says that the CFM LEAP-1B engine on the 737MAX family
received 376 orders and 70 cancellations “has exceeded fuel burn expectations’ thus “de-risking the
in the first 5 months bringing its net orders application.”
to 306. On the back of that he says, “Boeing stands to capture orders
Also, Boeing has unannounced orders for from leasing agents as well as direct sales – again, China will
59 737s, 7 787s, 3 777s and a similar number feature as a prime buyer, notwithstanding the fact that Boeing
of 767s. Perhaps the identity of the buyers aims next year to open its 737 completion centre in Zhoushan.”
of some of these orders will be revealed One buyer could be DAE Capital, who famously ordered 200
at Farnborough. Saj Ahmad, Chief Analyst Airbus and Boeing jets and the 2007 Dubai Air Show. Ahmed
at Strategic Aero Research, who correctly says, ‘it is looking to make a splash as its propels itself back
predicted Emirates headturning order for the into the top ten of world aircraft lessors.” “Since buying out
Boeing 787 last year, says that he believes smaller rival AWAS, DAE Capital is keen to update its portfolio
“there’s a very good chance that Boeing and branch out beyond the GCC region and allow customers to
could once again dominate commercial pro- leverage the strength of Islamic and Shariah compliant financing
ceedings at the Farnborough for a number of instruments that largely do away with large interest-bearing
reasons.” “Chief among these is the sharper payments on monthly/annual leases,” Ahmed says. “DAE Capital
than envisaged cost falls on the 787 program, arguably has one of the youngest fleet portfolios, representing

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