Boeing had its worst month in its entire history in March. It ended the month having lost 155 MAX orders allowing for direct public cancellations and deferments. That’s seen as just the beginning of far more to come.
Airbus found it has lost a net of 5 A350 orders, but the list of deferments is growing.
Delta announced it was taking on the order for LATAM’s 10 A350’s, and immediately deferred them, along with entering into discussions with Airbus to defer its own orders right across the spectrum, from the A350 down to the A220.
And both manufacturers are said off the record, to have been inundated with deferment and cancellation option requests, as well as renegotiated contract demands.
Neither of them is going to want to say who is doing what until the deals are made public, but cuts as deep as 30% in order books due to be delivered in the next three years are on the cards.
The one everyone is waiting for is the 777-9, because only the wealthiest airlines will want to take it on right now, and even they won’t want to outlay cash at this stage. Rumour has it that Emirates have quietly tried to find a way to hold off the last A380’s.
Another problem for the manufacturers is that airlines who do own aircraft, are trying to raise cash by selling aircraft and leasing them back, which is consuming much of the available lease company financing. Leasing companies are looking to ditch new aircraft orders they placed without having an end user lined up.
The immediate future is looking very dim for both manufacturers. They can but guess for now at a production rate that’s sustainable, and even then they can’t be sure the airlines will take the aircraft.
Neither of them wants to be unhelpful to the airlines, they want to protect their future custom. The question is how bad will things get before production can settle at a viable level and provide the basis for future stability and eventual growth?