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Aerospace industry

Airbus Takes Tough Line with Troubled Airlines

Strategic Insights

— 1 min read

Civil aircraft manufacturers, led by Airbus Industrie's senior partners, have warned that they will no longer support financially troubled airlines, citing finite balance sheets and declining investor confidence. Despite some encouraging signs in the market, including 76 new orders and 52 cancellations, the consortium expects to maintain a "modest" level of support for airlines in buying new aircraft. The warning comes as Airbus prepares to announce a major order worth $1 billion and launches a new financing arm.

Key Takeaways:

  • Airbus's senior partner, Dick Evans, warned that manufacturers will no longer support financially troubled airlines, citing finite balance sheets and declining investor confidence.
  • Evans pinpointed troubled US carrier TWA, stating that it should have "gone to the wall long ago."
  • Airbus is expected to announce a major order worth $1 billion from the International Lease Finance Corporation.
  • The order is likely to be a mix of A340 and A320 aircraft.
  • Airbus will launch a new financing arm early next year, but expects to maintain a "modest" level of support for airlines in buying new aircraft.
  • The consortium's president, Jean Pierson, stated that Airbus is on course to achieve its goal of 50% of the civil airliner market after exceptional circumstances.
  • Pierson detected some encouraging signs in the market, including 76 new orders and 52 cancellations, and an order backlog of 616 aircraft worth $15 billion.
  • Boeing's claim that Airbus inflated its order figures was dismissed by Pierson, who stated that "arrogance is not a sign of competence."

Statistics:

  • 76 new orders received by Airbus
  • 52 cancellations
  • Order backlog: 616 aircraft worth $15 billion
  • Airbus's goal: 50% of the civil airliner market
  • Price of the major order announced by Airbus: $1 billion ( airborne $650 million)

Sources:

  • Senior partner at Airbus Industrie consortium (name not provided)
  • Dick Evans, chief executive of British Aerospace
  • Jean Pierson, president of Airbus
  • BBC (no date mentioned)
  • A SENIOR partner in the Airbus Industrie consortium

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