Airlines place their bets, looking past pandemic to renew fleets

As the world hunkers down for Omicron, some investors might expect the global jet market to be withering away. Far from it. Business has begun humming again as airlines look to snap up the greener passenger and freight planes they believe will give them an edge in a post-pandemic recovery driven by predicted travel demand plus the relentless rise of online shopping. From Arizona to Amsterdam, some of the industry's sharpest buyers are eyeing efficient jets for the second half of the decade, aiming to get ahead of the long waiting lists they fear could derail their growth and environmental targets. On Wednesday, Singapore Airlines kicked off a trio of major decisions, with a tentative order to replace its cargo fleet with a new A350 lightweight freighter offering from Airbus. Qantas on Thursday selected Airbus to replace its fleet of ageing narrowbodies in what CE Alan Joyce has described as a "one-in-a-generation" decision that involved a switch from Boeing. The European planemaker also looks likely to seize a narrowbody order from KLM as early as Thursday. "People are thinking about long-term fleet plans and especially about ESG (environmental, social and governance)," said Rob Morris, global head of consultancy at Ascend by Cirium. "It's a case of: 'If I don't think about my replacement cycle now, am I going to get left behind'," he added. Airbus and Boeing are sold out on benchmark medium-haul models until mid-decade after a previous, much larger order boom that was losing momentum when the pandemic wreaked havoc. But with such long lead times before jets can be delivered, the focus is now turning towards the second half of the decade and a move to get in the front of the queue for future capacity.<br/>