Should anybody harbor any doubts, two recent events confirmed that the mid-decade airline-order boom has ended: Airbus announced A320 production cutbacks and Ryanair has come looking for bargain-basement prices for single-aisle airplanes. Airbus now plans to cut single-aisle production from 36 to 34 a month starting in October and possibly to a lower rate later.
European low-cost carrier Ryanair has entered “early negotiations” to order 200 to 300 new Boeing 737-800s or Airbus A320-series airliners in the coming two years. The equipment, which includes replacement capacity, would support continued expansion during the 2012 to 2017 timeframe, with Ryanair potentially benefiting from any decline in aircraft prices during the current recession.
What will the regional airline industry look like when the economic dust settles? That’s the question the Regional Airline Association challenged its panelists to answer at the RAA fall meeting, held October 28 and 29 in Washington, D.C.
UK regional airline Eastern Airways is “exactly on track, or slightly ahead” of projections for this year, according to COO Chris Holliday. Although he attributes continued profitability to tight financial controls, Eastern has “always been extremely focused on costs,” he said.
“If you can’t beat them, join them” might well have been the theme for a debate on the challenge posed by the so-called no-frills carriers during last month’s general assembly of the European Regions Airline Association (ERA) in Salzburg, Austria.
In an industry where airlines have all too often been run by aviators instead of businessmen, Aer Arann chief executive Padraig O’Ceidigh (pronounced ‘O’Kaygee’) has brought a cautious–if not typically Irish–approach to the airline. “The most important word in business is ‘no’,” he asserts.
While regional airlines in the U.S. enjoy something of a renaissance as a result of post-9/11 capacity restructuring, Europe’s regionals continue to register unspectacular traffic growth and progressively deteriorating yield performances. The reasons vary, but delegates at last month’s ERA spring conference in Barcelona more often than not pinned the blame on the rise of the discount fare segment.
Boeing has awarded Goodyear Tire & Rubber, the world’s largest supplier of aircraft tires, a six-year contract to provide Flight Leader and Flight Radial tires for 737NG aircraft. The “unique body cord shape” of the reduced-weight units is said to minimize stress on takeoff and landing. The tires will equip aircraft to be delivered to operators such as All Nippon, Continental, Ryanair and Southwest.
JetBird, the planned low-cost air charter service, caused quite a stir at the 2006 EBACE exhibition when it ordered 50 of Embraer’s Phenom 100 very light jets and optioned another 50. Speaking exclusively to EBACE Convention News before this year’s show, JetBird managing director Paul Gearney confirmed that the order still stands and that the operator expects to begin flying in April 2009.
Details of Irish carrier Ryanair’s latest contract with Boeing illustrate some of the negotiable areas within such agreements. Last month, the low-cost carrier completed its fourth 737-800 order in seven years under aggressive plans that predict fleet growth from 82 such aircraft to 225 by March 31, 2012. By then, Ryanair expects to carry 70 million passengers annually, compared with 34 million in the current year.