British Airways’ online sale of thousands of surplus stock not needed for its aircraft caused a stampede of buying from aviation enthusiasts and bargain-hunters.
In the first 24 hours, 5,000 purchases were made, with the website getting 250,000 page views. In the first four days, 1,900 six-packs of bread baskets were snapped up.
Meal trolleys were among the first to sell out. Items from the now-retired Boeing 747s in BA’s aircraft fleet were in big demand.
Trouble is, the sell-off seems to have been so popular it risks becoming a PR headache.
– Market faces potential surplus of 1,000 jets next year
– Air Lease CEO less worried about surge in MAX deliveries
– Older aircraft won reprieve during MAX grounding
– Boeing aims to deliver record-matching 70 MAX a mth on return
HONG KONG, Nov 5 (Reuters) – Airlines struggling to cope with the grounding of the 737 MAX could face a markedly different problem when Boeing Co’s best-selling jet is cleared to re-enter service: a switch to concerns about aircraft oversupply, carriers have been warned.
The U.S. planemaker has continued to produce the jet since it was grounded in March after two fatal accidents, and is expected to speed deliveries by 40%, to 70 units a month, when its factory doors reopen, in a bid to clear the backlog.
Rob Morris, global head of consultancy at UK-based Ascend by Cirium, said the combination of any rapid rebound in deliveries, economic worries and an accumulation of market pressures dating back before the crashes could make it hard to absorb the jets.
“Next year is the challenge. When the dam breaks and the MAX starts to flow, there are going to be a lot of aircraft,” Morris told financiers at a Hong Kong briefing late on Monday.
“There could potentially be as many as 1,000 surplus aircraft next year.”
The forecast is based on both a rebound in MAX deliveries and a potential glut of second-hand airplanes flooding back onto the market after standing in for the MAX during the grounding.
The crisis has rekindled demand for older and less efficient jets, with airlines using more than 800 planes that are more than 15 years old, compared to conditions four years ago, Morris told the Airline Economics Growth Frontiers conference on Tuesday.
TWO-YEAR LOG JAM
Until now, most concern has focused on whether regulators would permit an orderly return to service by avoiding gaps in approvals by different countries.
But Morris, who has warned a long up-cycle in aviation is nearly over, said there were also risks in opening floodgates too quickly, overwhelming fragile growth in travel demand.
Still, he and other delegates at back-to-back aviation finance gatherings in Hong Kong agreed it would take Boeing 18 months or longer to deliver all the stranded aircraft.
The operation will be one of the industry’s biggest ever logistical challenges and any glitches or delays could further brake supply.
“Getting all those aircraft, that are currently parked, off the ground could take two years,” John Plueger, chief executive of Air Lease Corp, told Reuters, adding he did not see fundamental changes as a result of the MAX’s return.
“It is not as if all these MAX could be delivered over a one-, two- or three-month period … so it is not an open floodgate and 350 planes all coming onto the market tomorrow,” he said on the sidelines of last week’s Airfinance Journal Asia Pacific conference.
Boeing aims to return the 737 MAX to service in the United States by the end of 2019, after making software changes in the wake of the crashes, which killed 346 people.
Europe’s top regulator said on Monday the airliner is likely to return to service in Europe in the first quarter of 2020.
Analysts say more than 300 MAX aircraft have been produced since March, when commercial flights were banned and deliveries frozen. This could rise to 400 by the time it resumes service.
Boeing is additionally expected to deliver close to 600 jets straight from the production line next year. It has indicated it plans to deliver up to 70 jets a month, equal to a previous record. Of this, analysts say around 20 are expected to be drawn from inventory parked at its factories and the rest newly built.
(Reporting by Tim Hepher and Anshuman Daga in Hong Kong Editing by Matthew Lewis and Clarence Fernandez)
WASHINGTON
(Reuters) – Purchases of U.S.-made Boeing Co aircraft by China could be
part of a sweeping deal currently being negotiated to end the
months-long trade war between Washington and Beijing, Boeing’s top
executive said on Thursday.
A
tit-for-tat trade war between the world’s two largest economic powers
has slowed the global economy. It has also opened up new risks for
Boeing, which calls itself America’s biggest exporter, in the world’s
fastest growing aviation market. Boeing sells roughly a third of its
top-selling U.S.-made 737 jetliners to customers in China.
Boeing
Chief Executive Dennis Muilenburg told an aviation summit in Washington
that he sensed U.S.-China trade talks were progressing “in a good way.”
“They
are dealing with some of the tough framework issues around intellectual
property and things like that,” Muilenburg said. “I do think they are
making progress. And at the same time, I think there’s an economic
opportunity here for airplanes to be part of the ultimate deal and help
further close the trade deficit gap.”
Governments
typically use jet deals to achieve broader diplomatic objectives. In
talks with Beijing, U.S. officials have demanded more details on China’s
pledge to make big purchases of American goods, as well as to push for
ways to hold China to any commitments on changes to industrial policies.
U.S.
President Donald Trump has demanded that China shrink its widening
trade surplus with the United States. On Wednesday, the U.S. reported
the goods trade deficit with China rose 11.6 percent to an all-time high
of $419.2 billion in 2018.
China
is poised to overtake the United States as the world’s largest aviation
market in the next decade and is gobbling up planes made by both Boeing
and European rival Airbus SE, while also investing in homegrown
aircraft businesses.
Boeing forecasts Chinese demand for 7,700 new airplanes over the next 20 years valued at $1.2 trillion.
(Reporting by Eric M. Johnson and David Shepardson in Washington; Editing by Tom Brown)
NOTE: Planesintheair.com forcast that 12 to 16 Boeing 747-8F freighters will be included in any new US-China trade deal!
SEATTLE (Reuters) – Boeing Co is close to a deal worth $3.5 billion (2.66 billion pounds) at list prices to sell 30 Boeing 737 MAX jetliners to ANA Holdings, two people familiar with the matter said.
The deal is the first sale in Japan for the newest version of Boeing’s best-selling 737 family and marks a reversal for Europe’s Airbus, five years after the same airline became the first Japanese carrier to pick the competing A320neo.
It also coincides with negotiations between Washington and Tokyo over a potential trade pact, with Japan facing pressure from U.S. President Donald Trump’s administration to cut its trade surplus with the United States.
Boeing declined to comment. ANA could not immediately be reached for comment. A deal announcement could come as early as Tuesday, subject to the airline’s final approval, the sources said, speaking on condition of anonymity.
The Boeing 737 MAX and Airbus A320neo have amassed thousands of orders due to significant fuel savings offered by a new generation of engines.
But the world’s largest plane makers continue to wage fierce market battles, while Boeing has been chipping away at Airbus’s recent lead in the market for such medium-haul airplanes.
Trump and other top U.S. administration officials have criticized Japan over trade, asserting that Tokyo treats the United States unfairly by shipping millions of cars to North America while blocking imports of U.S. autos and farm products.
Japan says its markets for manufactured goods are open, although it does protect politically sensitive farm products.
In September, Trump and Japanese Prime Minister Shinzo Abe agreed to start trade talks in an arrangement that appeared, temporarily at least, to protect Japanese automakers from further tariffs on their exports, which make up about two-thirds of Japan’s $69 billion trade surplus with the United States.
Japan has insisted the new Trade Agreement on Goods would not be a wide-ranging free trade agreement, but U.S. Trade Representative Robert Lighthizer said last year he was aiming for a full free-trade deal requiring approval by Congress.
(Reporting by Eric M. Johnson in Seattle and by Reuters bureaus; Editing by GV De Clercq and David Evans)
