Air Lease sounds alarm over future of delayed Boeing 777X
By Tim Hepher and Padraic Halpin
DUBLIN, May 9 (Reuters) - Boeing BA.N suffered a further setback to its delayed 777X jetliner project on Monday when one of the aviation industry's most influential leaders, leasing veteran Steven Udvar-Hazy, said its future could be at risk.
The U.S. planemaker last month pushed back first delivery of the world's largest twin-engined jetliner by more than a year to 2025, five years after it was originally due.
Asked if he now saw risks to the future of the 777X programme from the delays, Udvar-Hazy, Executive Cchairman of Air Lease Corp AL.N , said "yes".
Pressed on whether it was possible the whole programme could be cancelled, Udvar-Hazy, widely see as the father of the modern leasing industry, said that would depend on what the Boeing board looks like in 18 to 24 months.
"What I'm saying is that those decisions whether to continue with the programme or not, it will probably not be made by this board of directors anyway," Udvar-Hazy told the Airline Economics conference in Dublin.
Boeing could not immediately be reached for comment.
Plans to update the 777 mini-jumbo with a larger 400-seat version using more efficient carbon-fibre wings and new systems have been hit by certification problems, industrial delays and waning demand for the biggest jets.
Announcing the new delay with quarterly earnings last month, Boeing Chief Executive Dave Calhoun said, "We've got to give ourselves the time and freedom to get this right".
Air Lease Chief Executive John Plueger told a separate session of the same Monday conference: "One has to question a little bit the 777X programme and its viability".
He added that Air Lease had received requests from two airlines that are current or potential 777X customers about availability of the Airbus AIR.PA A350 since Boeing announced the fresh delay, though he was unsure if the moves were linked.
Udvar-Hazy said Air Lease had considered buying a recently announced freighter version of the 777X but had decided not to do so because there were "too many questions and delays".
Air Lease became a launch customer in November for a rival new Airbus A350 freighter version, though Boeing leads in the order race for the two models after a deal with Qatar Airways.
Both executives voiced frustration over paralysis also affecting the smaller Boeing 787, which has not been delivered for a year as Boeing discusses production flaws with regulators.
"I have never seen anything like (it)," Udvar-Hazy told the Dublin conference, noting that airlines can cancel airplanes once they are a year late.
Plueger said one airline had filed such a cancellation for a Boeing 787 in the past week.
He did not rule out further delays to Airbus' new A321XLR after the European firm announced a three-month delay last week.
Plueger said the delay could become six or nine months, but was unlikely to reach a year or two. Airbus wants to allow the structure of engines to absorb some impact in the event of a crash landing but regulators are insisting on strengthening its redesigned fuel tanks to absorb any impact and prevent fire.
Reporting by Padraic Halpin and Tim Hepher; Editing by Bernadette Baum and Emelia Sithole-Matarise
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.