Airliner backlogs continue to build back bigger at the Paris Airshow with more sales agreements signed in chalets on Wednesday. While the flow of new deals slowed somewhat compared with the event’s first two days, the scale of the new business appears on track to meet at least the lower end of UK-consultancy IBA’s projection of between 2,100 and 3,000 aircraft.
Avolon once again stepped up to sign a memorandum of understanding to take 20 Airbus A330s. The leasing group indicated its eagerness to secure early delivery slots for the A330-900 version of the twin-engined jet.
Boeing also got more backing from the lessor community when Air Lease Corporation announced orders for a pair of 787 Dreamliners. The company has been a 787 customer since 2010 and its portfolio now includes both the -9 and the -10 variants of the widebody.
In the narrowbody sector, India’s Akasa Air ordered four 737 Max 8s, taking its commitment to the type to 76 aircraft. Luxair confirmed its decision to build its short-haul fleet around the 737 Max 7, for which it serves as the European launch customer with an order for four units.
Industry Uptick Could Fuel M&A Deals
After a four-year hiatus since the 2019 Paris show, financiers are back burning shoe leather as they pace along the Le Bourget chalet lines looking to put mergers and acquisition deals together. One of them is Michael Richter, managing director and global head of Lazard’s aerospace and defense investment bank, and he sees this as the right time to “create a better capital supply chain” by matching buyers to sellers of aviation assets in a new wave of consolidation.
“We’re at the beginning of a strong upcycle and three to five years from now we’ll realize that there have been big increases in profitability as expenses are rationalized,” Richter told AIN, reflecting on the uptick in sales.
But that’s not to say he doesn’t see difficulties in the face of factors such as inflation and rising interest rates that he said “are wreaking havoc on the sector,” as the cost of financing rises at a time when companies need to invest to rebuild supply chains that cracked under the strain of Covid. “There is always the risk of external shocks but the industry always recovers,” Richter concluded.