Air Lease Corp.’s Executive Chairman Steven Udvar-Hazy is frustrated with Airbus and Boeing. The lessor faces delivery delays for “every one of our single-aisle” aircraft from the two major airframers as supply chain issues mount. “The supply chain, starting with the engine manufacturers, the people that make landing gear … the people that make bits and pieces, are not equipped today to meet the production goals,” Udvar-Hazy said in a wide-ranging conversation at the ISTAT Americas conference on Tuesday. He added that he only found out “this morning” — March 8 — that all of ALC’s 2022 Max deliveries are delayed. The delays average a month. The lessor is scheduled to take delivery of 27 Airbus A320neo-family and 33 Boeing 737-Max family aircraft this year, according to its 2021 annual report released in February. All of the aircraft are already placed with customers. The latest narrowbody delays raise series questions about the airframers’ plans to raise production rates. Airbus aims to deliver 720 commercial aircraft, and Boeing as many as 500 aircraft in 2022 — both represent double-digit increases over last year. And both companies have ambitious goals to ramp production to a combined 110-120 A320neo and 737 Max monthly over the next few years. Executives for neither planemaker have said the increases will be easy, but see the targets as achievable. Cowen & Co. analyst Cai von Rumohr also questions Boeing’s delivery targets. In a report Tuesday, he said the 500 aircraft target increasingly looks “like a stretch” and cited the planemaker’s weak February numbers when it delivered just 20 aircraft. Asked whether Boeing’s relationship with the FAA is delaying the Max, Udvar-Hazy said no and again pointed to the airframer. Boeing needs to “get their act together,” he said. This is not to say FAA relations are not negatively affecting Boeing and its customers. ALC has no view on when the airframer will resume 787 deliveries, Udvar-Hazy said and called a summer resumption “optimistic.” The departure of FAA Administrator Steve Dickson on March 31 has left the agency a “headless ship” amid rework on the 787, certification of the 737 Max 7 and 10, and the 777X program. “This is all because of the Max, and what Boeing did with the Max,” he said of the slow pace of the FAA.<br/>
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US airlines have begun paring flight plans due to soaring fuel prices, underscoring the speed at which Russia’s attack on Ukraine has upended the industry and jeopardized a hoped-for rebound this year. Alaska Air Group Inc. will trim flying by as much as 5% in the first half in response to “the sharp rise in fuel costs,” according to a regulatory filing Tuesday. Allegiant Airlines plans to reduce Q2 capacity between 5% and 10%, CFO Greg Anderson said at a Raymond James Financial Inc. conference Monday. The carrier will trim flight frequency mainly in weaker demand times. The comments, relayed in a note by Raymond James analyst Savanthi Syth, were confirmed by an Allegiant spokeswoman. The industry concern is that exorbitant gasoline prices could sap consumers’ spending power and lead to slower demand for vacations and other leisure pursuits. Higher prices also raise costs for airlines, making it difficult to maintain profits if they can’t pass the expenses along to customers. Spot jet fuel prices for delivery in New York harbor have jumped 73% this year to $3.98 a gallon, the highest since 2008. In January US airlines were predicting they’d pay around $2.50 a gallon. Seattle-based Alaska sees continued strong demand for spring break and summer travel, but it cited fuel prices as a significant uncertainty. “The impact on the economy is the question we all have now,” CFO Shane Tackett said at a Raymond James conference.<br/>
Aircraft owners are coming to grips with the loss of hundreds of Airbus and Boeing jets that Russian carriers have effectively shielded from seizure behind a new incarnation of the Iron Curtain. With the window just about closed, foreign leasing firms have succeeded in repossessing only about two dozen of the more than 500 aircraft rented to Russian carriers, according to Dean Gerber, general counsel for Valkyrie BTO Aviation. The planes in limbo have a market value of about $10.3b, aviation analytics firm Ishka estimates. Technically, lessors have until March 28 to retrieve the planes under European Union sanctions. But state-owned Aeroflot PJSC and other Russian airlines have already gathered the vast bulk of them back inside the country, out of reach of their owners. The government aided the effort by instructing carriers to stop flying internationally and return the jets to Russia by Tuesday. “The number one fear right now is that these aeroplanes are gone forever,” said Steve Giordano, managing director of Dover, Delaware-based Nomadic Aviation Group, one of a handful of firms specializing in aircraft repossessions. With the window just about closed, foreign leasing firms have succeeded in repossessing only about two dozen of the more than 500 aircraft rented to Russian carriers, according to Dean Gerber, general counsel for Valkyrie BTO Aviation. The planes in limbo have a market value of about $10.3b, aviation analytics firm Ishka estimates. Technically, lessors have until March 28 to retrieve the planes under European Union sanctions. But state-owned Aeroflot and other Russian airlines have already gathered the vast bulk of them back inside the country, out of reach of their owners. The government aided the effort by instructing carriers to stop flying internationally and return the jets to Russia by Tuesday. “The number one fear right now is that these aeroplanes are gone forever,” said Steve Giordano, managing director of Dover, Delaware-based Nomadic Aviation Group, one of a handful of firms specializing in aircraft repossessions. Story has more.<br/>
Russia’s decision to block foreign owners from seizing hundreds of planes worth about $10b is roiling a market where aircraft leases are bundled into bonds and sold to investors. European Union sanctions imposed on Russia because of its Ukraine invasion give plane owners until March 28 to retrieve the vehicles. But only a handful have been extracted, and hopes for more are dim. And so some asset-backed securities in the aviation space are coming under duress as a result. Although these types of transactions are designed to survive cash flow problems at the airlines leasing the planes, fully losing access to planes under these circumstances almost guarantees that lease payments that feed these ABS deals will soon dry up, with recourse uncertain. “It will be interesting to watch, as potentially the bottom capital structure could start to see losses,” said Jennifer Thomas, portfolio manager at Loomis, Sayles & Co. The situation has already had a chilling effect on over two dozen aircraft ABS deals that are exposed to the region, with investors fearing some tranches within those deals might take losses. Among the ones most exposed are two from Carlyle Aviation -- one with 44% and another with 37% of lease payments tied to Russia or Ukraine -- and two others from Castlelake Aviation. Moody’s Investors Service has done the same to one Castlelake ABS. According to a March 7 note from the credit rater, the deal will see reduced cash flow due to “foregone lease income tied to early lease terminations and increased transaction costs stemming from potentially prolonged repossession and remarketing timelines associated with the aircraft on lease to Russian airlines.”<br/>
Russian planes that stray into British airspace could be detained by the British government, the transport secretary announced on Tuesday. Grant Shapps said he had made it a criminal offence for any Russian aircraft to enter UK airspace, as the government scrambles to sanction Russia for its brutal war on Ukraine. He tweeted: “I have made it a criminal offence for ANY Russian aircraft to enter UK airspace and now HMG can detain these jets. We will suffocate [Vladimir] Putin’s cronies’ ability to continue living as normal while thousands of innocent people die.” He also published a letter, sent to all UK airports and airfields, outlining the new measures, including giving air traffic control powers to “issue directions to a pilot or operator of a Russian aircraft not to enter UK airspace, or to leave it by a certain route”. It read: “The aviation sector is fundamental to connectivity and international trade and we must play our part in restricting Russia’s economic interests and holding the Russian government to account. “In these circumstances the Department for Transport does not consider it appropriate for Russian aircraft to enter UK airspace or land at UK airports.” Most European nations, including the UK, closed airspace to Russian aircraft last week in response to the invasion of Ukraine. The closures have left Russian airlines facing an almost complete blockade from flying west over Europe after they were barred from the airspace of nearly 30 countries.<br/>
India will resume scheduled international flights after two years from March 27 and end air-bubble arrangements, the aviation regulator said Tuesday. The move may spell a further boost for Indian carriers, which are adding back capacity as more people take to the skies with Covid-19 infections receding and vaccination cover increasing. Falling infections have paved the way for relaxations in movement curbs and boosted domestic travel. Both IndiGo, India’s top airline, and SpiceJet posted surprise profits in the quarter through December, underscoring a travel recovery is underway. Vistara, Singapore Airlines’ Indian joint venture, is back to its pre-covid capacity and resuming in-flight services like tea and coffee on domestic trips of 90 minutes or more, and offering a wider choice of food in premium cabins, CEO Vinod Kannan said last month. Opening up of international travel will help Indian carriers resume their expansion plans. IndiGo is looking to increase international routes to 40% of its capacity in five years from 25% and start non-stop flights to cities like Moscow, Cairo, Tel Aviv, Nairobi, Bali, Beijing and Manila, CEO Ronojoy Dutta said last year. Vistara will look at starting direct flights to the US as soon as the airline gets confirmation on the delivery of Boeing 787 aircraft, Kannan said.<br/>
Malaysia will allow quarantine-free entry for fully vaccinated travelers from April 1, ending almost two years of stringent border controls introduced to contain the Covid-19 outbreak. “Citizens with valid travel documents can enter and leave the country as they did before the pandemic,” PM Ismail Sabri Yaakob said Tuesday. Foreigners will no longer need to apply for MyTravelPass, which will be abolished next month, he said. The reopening marks the final step in the lifting of virus curbs, as Malaysia joins other Southeast Asian nations in transiting to the endemic phase of the outbreak. A high vaccination rate -- 64% of adults have got booster shots -- has allowed the government to rollback restrictions that battered the tourism sector and pushed the economy into contraction for two quarters in 2021. “This announcement will revitalize the economy, particularly tourism, which was severely affected,” Ismail said. Travelers must take Covid tests before departure and upon arrival in Malaysia. Malaysia recently allowed fully inoculated travelers from Thailand and Cambodia to skip quarantine from March 15. This will add to the existing vaccinated travel lane pact with Singapore. A similar one with Indonesia is still under planning. “For countries that still shut their borders, citizens still benefit from VTLs that were agreed between Malaysia and those countries,” Ismail said.<br/>
Airbus and Australia’s Fortescue Future Industries (FFI) have signed an MOU to study liquid hydrogen and power-to-liquid fuels for aviation. In joint statements, the two companies reaffirm Airbus’s ambition to see an in-service hydrogen powered aircraft by 2025. The MOU will see the two companies look at regulations, supply, and infrastructure related to the deployment of hydrogen as an aviation fuel. Airbus will share its knowledge about fleet energy use, hydrogen demand scenarios in aviation, refueling specifications and the aviation regulatory network. FFI, for its part, will look at technology drivers in the hydrogen supply chain, and will create infrastructure deployment scenarios at targeted airports. According to its web site, FFI is focused on producing zero-emission green hydrogen from renewable sources. “Partnerships and cross-sectoral approaches are a necessity to make zero emission aviation a reality,” says Glenn Llewellyn, Airbus’s VP of Zero Emission Aircraft. “Airbus is preparing itself to put a zero emission aircraft in service by 2035. But this will only be possible if we can ensure enough green hydrogen is produced worldwide and I’m thrilled to see FFI enthusiasm with regards to our ambition.” Airbus has worked actively in the Asia-Pacific to form partnerships to explore hydrogen as a fuel. At the February’s Singapore Airshow the airframer launched a study with Changi Aviation Group, the Civil Aviation Authority of Singapore, and industrial gas company Linde to validate Singapore’s potential as a “Hyrdogen Hub.” <br/>
Boeing delivered 22 jetliners to customers in February, its fewest since August, as a pause in Dreamliner handovers continues to weigh on the company. Twenty of those aircraft were 737 Max planes. Deliveries of jets are crucial for Boeing and other manufacturers because that’s when customers pay the bulk of the plane’s price. Deliveries of the wide-body 787 Dreamliner have been paused for most of the time since fall 2020 as Boeing addresses a series of manufacturing flaws that have required fixes and more in-depth inspections. American Airlines last month announced additional cuts to its international summer schedule because of Dreamliner delivery delays. It said it expects to receive 10 Dreamliners this year, down from the 13 it previously expected. Boeing logged 37 new orders last month. Thirty-two of them were 737 Maxes, including 18 for lessor Air Lease. An unidentified customer bought five 777 freighters as air cargo demand continues to remain robust during the Covid pandemic. Air Lease canceled bookings for four Dreamliners. Boeing’s orders for customers in Russia are still in its backlog, despite the fact that it and rival Airbus said they would no longer supply parts or service aircraft there. Boeing’s deliveries to Russia have been suspended, however. Boeing has 85 airplanes on order by Russian airlines or by lessors that are slated to go to Russian airlines, while Airbus has 66, according to aviation data and consulting firm Cirium.<br/>
Airbus delivered around 50 aircraft last month, people familiar with the matter said, stepping up handovers as coronavirus concerns eased and before the war in Ukraine dimmed recovery hopes for airlines. The figures are still being audited with a final tally due later Tuesday, according to the people, who asked not to be named discussing confidential information. The European planemaker will have delivered about 80 aircraft in January and February as it targets 720 over the course of 2022. Airbus SE delivered around 50 aircraft last month, people familiar with the matter said, stepping up handovers as coronavirus concerns eased and before the war in Ukraine dimmed recovery hopes for airlines. The figures are still being audited with a final tally due later Tuesday, according to the people, who asked not to be named discussing confidential information. The European planemaker will have delivered about 80 aircraft in January and February as it targets 720 over the course of 2022.<br/>