models to better compete with the from-scratch budget
carriers that continue to emerge.
“What you are seeing is that LCCs are moving into
a di;erent phase of development, with more consolidation, where the stronger players will get stronger and the
weaker players will get absorbed or go away,” Dublin-based SMBC Aviation Capital CEO Peter Barrett said.
Trade wars & delivery challenges
One concern for the future of the market surrounds the
potential impact on aircraft and engine sales of trade
wars and tari;s between the Trump administration and
regions that include China, Canada and Europe. China
is of particular concern because of the very large num-
ber of aircraft that country’s airlines and lessors are or-
dering and projected to need as part of their growth
plans. But most lessors see little immediate e;ect on
“We are seeing no impact on our ability to deliver
US manufactured aircraft to Chinese customers,”
BOC’s Martin said. “However, anything that creates
uncertainty in trade relations is likely to slow down
decision-making and this is the potential impact that
we see stemming from tari; discussions.”
SMBC’s Barrett cautioned, “if the trade rhetoric
and actions continue, it could have a very detrimental
e;ect” on the leasing and aircraft manufacturing busi-
Of greater near-term concern is the ability of OEMs
to ramp up production for mid-and-upper range commercial aircraft in the face of ongoing new engine development problems that have delayed aircraft deliveries to
lessors and airlines.
Plueger said ALC continues to be impacted by significant engine problems on the Pratt & Whitney-powered
geared turbofan powering A320neo. In addition, there
remains issues with the CFM International LEAP that
powers the neo and MAX, as well as problems with the
Rolls-Royce Trent 1000 engine that powers the 787.
“;e remaining challenge is whether the powerplant
providers can fulfill their contractual obligations to Airbus and Boeing,” Plueger said.
A Regional Revival
Airbus’ new partnership with Bombardier on the A220
program and Boeing’s potential joint venture with Embraer
is changing how the regional aircraft market is perceived
“The regional market is undergoing significant change,”
said Anne-Bart Tieleman, CEO of TrueNoord, a lessor
whose fleet consists of 21 regional aircraft and one A330-
200. “The growth of regional air transport is accelerating
because people, communities and businesses are increasingly seeking ways to better connect with one another.
Airbus and Boeing will accelerate this change.”
Airbus and Boeing’s involvement in A220 and E2
jet programs is welcome. Demand for regional aircraft,
In July, ATR released its market forecast, which
projected deliveries of 3,000 turboprops over the next 20
years. IBA said ATR maintains a healthy backlog of over
250 aircraft, roughly three years production.
turboprop-powered aircraft particularly, has been at a low
point over the last three years. Yet, Mike Yeomans, head
of valuations at aviation consultancy International Bureau
of Aviation (IBA) says there has been pent-up demand for
regional aircraft over the last year.
Sales of 66- to 104-seat regional jets have slowed in
recent years, but the announcement by Delta Air Lines in
June that it was purchasing 20 Bombardier CRJ900s
seems to demonstrate renewed activity in this sector.
TruNoord is expanding its global footprint beyond its
European base by leasing regional aircraft to operators in
the Americas, Central and Southeast Asia.
Tieleman gave a practical reason for regional aircraft’s
continued use globally: “Regional aviation provides a lifeline for areas of the world with non-existent or poor road
and rail infrastructure.” –Robert W. Moorman
THE NEWLY-NAMED Airbus A220 flies at the Farnborough Air
Show in July.