Boeing, who is stuck in a
ordering down cycle, does a pick six 787-9's from Ruili, a Chinese airlines
expanding its footprint going forward. This year, in particularly is noted as
a "order pause year" for Boeing citing low fuel costs and customer's solid fleet inventory as a
reason for the 2016 pause. Airbus also has had a slow order start, thus making any
order binges "so last year". This period sets up as an airshow dependent year for
order announcements.
Ruili 737 in action
The
airshow grows in importance when Boeing or Airbus tents have something to
say at the shows. Even though Boeing holds this year’s order lead during the
first half of 2016, an airshow may change whose doing what to whom. My own
order predictions are out the window as the makers are shaking the order tree
for any ripe commitments. Any prediction will be coming from the airplane
makers themselves born out of hopefulness from a friendly customer. The other
side of the order business is hanging onto any orders placed prior to 2016, and
preventing cancellations. This year remains prone to order cancellations in the
wide body arena.
Flash Back 2015:
The
economy is not the culprit for airline ordering malaise, but underlying factors
contribute to the order pause such as competitive risks. Opening a new route
with its current aircraft inventory is a risk when the competitive margins are
slim going into a new market served by another airline. Buying new aircraft for
such a market is a greater risk. An expanding airline such as Ruili may
hesitate investing with new equipment when they have older. However, in Ruili's case
they have a small inventory to begin with including any wide bodied aircraft. Summarily, all Chinese based airlines are strictly given oversight by its
government and its respective fleet expansion mode. Making Ruili's order transaction an accomplishment for
Boeing completing the deal.
This does
indicate the condition of the world airline market where special situations makes the
order during 2016. The remainder of the year should see sales with customers
who have rendered down to a decision point, where risk taking becomes the higher
priority for its business model, rather than waiting for all the tea leaves to
line up before ordering. The six Ruili 787-9's is a big deal in today's market.
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