Carriers Hesitant To Accept Planes They Don't Need
Things may soon go from bad to worse for manufacturers of
commercial airliners. A recent study by an analyst with investment
firm UBS shows more major carriers are likely to defer their
scheduled deliveries this year, than was originally thought just
three months ago.
The Seattle Times reports analyst David Strauss conducted a
survey of major airlines in October 2008, asking whether those
carriers planned to defer orders in the next year as airlines
looked to slash capacity worldwide. At that time, only 8 percent of
respondents said they were likely to do so.
In a follow-up survey last week, however, that number soared to
nearly 33 percent. Strauss noted both manufacturers currently enjoy
a healthy backlog of orders, however, and that an equal number of
survey respondents said they would move up their deliveries if
earlier slots became available through the deferrals of others.
If those numbers hold, that likely bodes well for 2009... though
beyond that, the picture turns decidedly darker if the deferral
And then there's the matter of cancellations. Bertrand
Grabowski, a board member at Germany's DVB Bank, issued his airline
forecast Tuesday... and he expects at least 10 percent of airliner
deliveries now on the books for 2009 will be cancelled outright,
due to the lack of available financing.
"As manufacturers will try to avoid white tails at any cost, the
cancellations and long term deferrals may have to result in the
reduction of production, especially when it becomes clear towards
year end that demand will not see a strong short term recovery,"
Grabowski wrote to clients.
In order to accommodate all deliveries planned for 2009,
Grabowski says banks worldwide would need to provide about $28
billion in new financing... and in the age of government bailouts,
the money simply isn't there.