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Global developments presenting risks and rewards for the aircraft trading and financing market

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Headline News was last updated: January 12, 2010

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B787 graphic pinpointing the wrinkle problem: Click on Aircraft link to view.

January 2010

Airbus order book: Airbus booked orders for 310 aircraft (271 net) vs. 900 a year ago.

Airbus deliveries: Airbus delivered a record 498 aircraft (402 A320 family; 86 A330/A340s; 10 A380s) in 2009 vs. 483 in 2008.

EADS estimates it had $60B sales in 2009 vs. $63B in 2008.

Boeing order book: Boeing booked orders for 263 (142 net) commercial aircraft down by 60% in 2009 vs. 662 in 2008.

Boeing order backlog: Boeing has a backlog of 3,375 aircraft for delivery through 2017.

Boeing deliveries: Boeing delivered 481 commercial jets in 2009 vs. 375 in 2008: 372 B737s; 8 B747s; 13 B767s; 88 B777s - guidance was 480 to 485 aircraft.

Embraer deliveries: Delivered 125 commercial jets & 119 business jets (8 ERJs; 117 E-Jets; 18 Legacy 600s; 3 Lineage 1000s; 98 Phenoms) in 2009 vs. 204 in 2008.

Embraer order backlog: Embraer has a backlog of $16.6B.

Guggenheim Aviation Partners canceled two of four B747-8Fs orders, due to delivery timing issues.

ExpressJet is allocating its 244 ERJs in 2010: 206 will with Continental Express, 22 with United Express & 16 on charter.

ExpressJet will move 10 ERJs to United Express in May through October for a total of 32.

Japan Airlines (JAL) might post a 2009 full-year loss of $13.3B based on a massive restructuring charge says the Nikkei business daily.

JAL has made a loss in four of the last five years, has debts of $16B, and has been bailed out by the Japanese government four times.

JAL applied for a bailout from the Enterprise Turnaround Initiative Corp of Japan (ETIC) in October 2009.

JAL is expecting a $3.3B bailout from the ETIC as part of a planned bankruptcy filing.

IATA will now have to change its projected 2009 $11B loss for the 230 airlines it represents in 120 countries that carry 93% of the world’s international scheduled traffic.

IATA is forecasting a net loss of $5.6B for the airline industry in 2010 vs. the $3.8B predicted earlier in 2009. The 2010 projection may have to be revised.

JAL is Asia's largest airline by revenue.

Cyprus Airways will lease three A320s from CIT.

Hawaiian Airlines carried 8.3M passengers in 2009 vs. 7.9M in 2008.

Southwest Airlines reports traffic (RPMs) rose 1.3% in 2009 vs. 2008 on 5.1% lower capacity; however, enplanements were down 0.6%.

Allco Aviation (Sub. of Allco Finance Group, Australia, in bankruptcy) the aviation assets and business have been taken over by Hong Kong Aviation.

India wants 10 C-17 Globemaster IIIs and has submitted a Letter of Request to the US DOD for approval of the transaction.

Boeing order book: Boeing reported that commercial aircraft orders fell by 60% in 2009 to 263 aircraft in 2009 vs. 662 in 2008.

Boeing order book: Net aircraft orders – actual orders minus actual cancellations - were down to 142 for 2009.

Boeing order backlog: Boeing has a backlog of 3,375 aircraft for delivery through 2017.

Airbus will report its 2009 order figures on 12 January 2010.

Boeing delivered 481 commercial jets in 2009 vs. 375 in 2008: 372 B737s; 8 B747s; 13 B767s; 88 B777s matching guidance of 480 to 485 aircraft.

Ryanair has cash reserves of $3.6B and expects that to grow 'substantially' by March 2013 because of the planned cut back in aircraft buying.

Ryanair rejects speculation that it was preparing a third bid for Aer Lingus after pulling out of talks to buy 200 aircraft from Boeing.

Ryanair has cash reserves of $3.6B and expects that to grow 'substantially' by March 2013 because of the planned cut back in aircraft buying.

Aer Lingus Group (Ireland) formalized its code-share agreement with United Airlines to jointly operate scheduled service beginning 28 March 2010.

Qantas’ LCC subsidiary Jetstar (Australia) and AirAsia (Malaysia) may jointly acquire next-generation narrow body aircraft.

Aer Lingus (Flag carrier) and Aer Arann (Ireland) may form of code sharing agreement to service UK routes from Dublin and Cork

Ireland & deficit: The Irish Department of Finance has reported an Exchequer deficit of $35.3B for 2009, vs. $18.2B in 2008.

Ireland is a major base for international aircraft lessors and investors.

Iceland's president will not sign a controversial bill to $5.45B in compensation to the British and Dutch governments over the failure of Icelandic banks.

Iceland has received $10B in financial support from other countries including a $2.1B loan from the IMF received in November 2008.

Icelandic banks, airlines, and lessors are significant niche players in the global aircraft trading and financing business.

Japan: Finance minister resigned due to ill health as key decisions are being made about government support for Japan Airlines.

Japan’s economy: Public debt is almost 200% of GDP as Japan’s baby boomers are hitting retirement & savings are at their lowest ebb. 

Mesa Air Group bankruptcy: Mesa (Founded 1982, Phoenix) filed for CH 11 to eliminate surplus aircraft and reach a faster resolution in its lawsuit against Delta.

Mesa says it faces an untenable financial situation because of aircraft leases that are excess to requirements.

Mesa is suing Delta Air Lines for $70M for breach of contract.

Mesa operates 130 aircraft with over 700 daily departures to 127 cities, 39 states, Canada and Mexico.

Mesa operates as US Airways Express, Delta Connection, and United Express under contractual agreement with US Airways, Delta, and United.

Mesa also operates independently as Mesa Airlines and Go!-Mokulele (Hawaii). Go!-Mokulele is not filing for CH11.

Mesa operations: Between 1995 & 2000, 95% of Mesa’s flying came from operations associated with code sharing agreements with Major carriers.

Mesa operations: From 2000 to date, 75% of Mesa’s flying comes from revenue guarantee contracts with US Air, Delta, and United.

Mesa operates a fleet of 130 aircraft including CRJ100ER/LR, CRJ200ER/LR, CRJ700, CRJ900, Dash8, ERJ145 & Beechcraft 1900. Mesa has 10 aircraft on order and 106 on option.   

Mesa’s agreement with United for 26 CRJ200s and 10 Dash 8s expires in April 2010. 

Fleet surplus: Mesa expects to park 26 CRJ200s and 10 Dash 8-200s by April bringing the total to 70 stored aircraft.

Mesa may reduce or eliminating its fleet of ERJ-145s and CRJ200s according to a report from AAR.

Mesa & manufacturer relationships: In 2001, Mesa became the launch customer for the 86-seat Bombardier CRJ 900 & has 38 in service & 60 optioned.

Mesa status: Mesa topped $1B in revenue and moved from “regional” to “national” carrier as measured by the US Department of Transportation.

Turkish Airlines:  As part of a fleet expansion plan of 105 aircraft, ordered 14 A321s, six A319s for 2011-2012, option 10 A319/A321s for 2013.

Oil prices ended 2009 at a 14-month high of $80 per barrel vs. the $60 price that airlines need to break even. Security upgraded but selectively: 14 countries are now the focus of security as Americans no longer automatically face the full-range of security measures.

Security: Passengers to the USA from 14 countries including Nigeria, Yemen, Pakistan, Afghanistan & Saudi Arabia face full-body pat downs.

Security: Searches will be eased for Americans, and most others who are not flying through the 14-targeted nations on their way to the USA.

Japan Airlines: State-owned Development Bank of Japan doubles its credit line to $2.1B for Japan Airlines. JAL shares jumped 31% on the news.

Japan Airlines is said to favor the Delta Airlines investment plan as the company president said he is against the bankruptcy option.

American Airlines safety: FAA will increase oversight of American Airlines because of three mishaps in less than a month.

American Airlines aircraft overshot a runway in Jamaica on 22 December and aircraft wingtips touched the ground on landings twice in December.

American Airlines records: The FAA will examine aircraft records, pilot training methods, and increase cockpit inspections.

American Airlines – consequences: The FAA can impose a heavy fine if the incidents under review prove to be cases of systematic weaknesses. 

A330 pitot tube repair recommendations are inadequate and system-wide failures will persist, with dangerous consequences for passengers.

A330 pitot tube: Known safety deficiencies can lead to blockage of the A330 speed sensors due to icing according tom the Air France pilots union.

Delta/Northwest merger approved by the FAA approval. They now operate under one certificate, merge reservation & flight schedules, use common technical manuals. 

United Airlines (UAL) will sell $500M in bonds due in 2013, secured by selected routes, slots, and airport gate leases.

Mesa Air has filed notice with the Securities and Exchange Commission that it is delaying filing its annual results for 2009.

Mesa Air has a large fleet of stored aircraft and hinted at the prospect of a CH11 filing.

Fleet surplus: Mesa expects to park 26 CRJ200s and 10 Dash 8 aircraft by April bringing the total to 70 stored aircraft.

Mesa’s agreement with United for 26 CRJ200s and 10 Dash 8s expires in April 2010. 

Mesa may reduce or eliminating its fleet of ERJ-145s and CRJ200s according to a report from AAR.

Mesa is restructuring as it negotiates a contract dispute with Delta and renegotiate 70 aircraft leases.

Mesa Air did expect to report a lower net loss in 2009 than the $29.2M loss reported for the fiscal year to Sept. 30, 2008.

2009 activity: Mesa established a profitable operation in Hawaii, had a costly court battle with Aloha, a contractual dispute with Delta, & lost two flying contracts with United.

Cargo traffic: Air cargo traffic grew 9.5% globally in November 2009, the first expansion since May 2008 says IATA.

Capacity: For the first 11 months of 2009, international airfreight traffic was down 12.7% from the same period last year.

Cargo traffic regionally: Compared to November 2008 Asian grew 14.5%,   North American 13%, Middle East 21% & Latin American 17.5%.

Capacity: Airfreight capacity for the full year of 2009 was down 9.2%.