2016 view and a closer look at the new narrowbodies, February 2016

In this session IBA’s John McMahon, Phil Seymour, Stuart Hatcher and Paul Lyons take a look at the year ahead with a focus on the new narrowbodies. To summarise the following conclusions were drawn:

  • Airlines are in great position to review fleets/networks and cost optimisation
  • Part Out Sector – plenty of liquidity and new entrants
  • Ability to balance supply and demand and having product knowledge is crucial
  • OEM Challenges – how to differentiate products not just on fuel burn and cash operating cost but the complete DOC and OC of maintenance and new inventory cost
  • Lessor Maintenance Reserves – can provide huge upside and cash, the saviour of lessors in the “retire or re-lease” decision. Revisit the adequacy and reset where possible
  • Lower fuel cost but exchange rate exposure pushing lessors to review lessee credit plus lessees need to revisit/optimise maintenance programmes to reduce dollar cost exposure

To download the full slide deck click on the link below.

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