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Aircraft Makers, Lessors Split on Market Outlook, by Robert Wall - Article Example

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This paper under the headline "Aircraft Makers, Lessors Split on Market Outlook, by Robert Wall " focuses on the fact that in the past, overbooking of Airbus and Boeings were satisfied by used aircraft in circumstances where new aircraft were not available. …
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Aircraft Makers, Lessors Split on Market Outlook, by Robert Wall
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Ryanair’s competitor, EasyJet makes a similar observation. EasyJet reports having difficulty selling used aircraft, specifically its “A319 narrowbodies” but as a result of low offerings, was forced to take the used aircraft off the market (Wall, 2012). The problem is attributed to financing according to an official attached to the aviation industry. It has become increasingly difficult to obtain financing for used aircraft that is “more than a few years old” (Wall, 2012).
The high cost of fuel has also contributed to the lack of interest in used aircraft. This is particularly true with respect to “high-fuel-burn” aircraft even in cases where the used aircraft is virtually new. It is therefore hardly surprising that Boeing 737-600s previously used by Malex Hungarian Airlines are currently being phased out as opposed to being leased or sold. The financial struggles of leasing companies are also contributing to the lack of interest in used aircraft. For example, International Lease Finance Corp. has experienced insolvency problems with some of the leased aircraft. In addition, leasing companies are facing competition from the higher rate of production of Airbus and Boeing aircraft. Thus, in the final analysis, the demands created by overbookings are easier to satisfy by new aircraft than by used aircraft.
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