Aircraft order backlogs remain intact for Asia-Pacific LCCs
Before the COVID-19 pandemic arrived, one of the most significant trends in the Asia-Pacific region was the vast number of narrowbody orders placed by LCCs. With the industry now in its worst-ever downturn, the future of these orders is a key question for a wide range of industry stakeholders.
For the LCCs themselves, the orders – and more importantly their delivery timetables – present extra headaches as their growth assumptions and financial conditions have changed considerably since the orders were placed.
Competitors will also be watching closely to see if delivery adjustments mean changes in expansion strategies. And the stakes are high for manufacturers and lessors, as the Asia-Pacific LCCs dominate their narrowbody order books.
Plenty of industry observers were sceptical that the Asia-Pacific airline industry could absorb the number of orders racked up by the LCCs in recent years, and such views will be exacerbated by the COVID-19 crisis.
So far there have been no major narrowbody order cancellations or airline collapses among the LCCs with the largest order books. While some have signalled that they remain committed to their narrowbody orders, most have had to negotiate delivery slowdowns of varying degrees.
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