Airbus is reportedly considering launching two new aircraft, a single-aisle and a widebody, to replace its A320 family (MarketWatch/Bloomberg, 02-Sep-2009). The twin-aisle widebody is reportedly being considered in a response to demand from LCCs, with the design to facilitate quick disembarkation and turnaround times.
Airbus reportedly considering A320 replacement with two new aircraft products
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State of the Market; Global aircraft leasing continues its international shift from west to east
Aviation leasing continues to see a favourable outlook, growing rapidly in both size and importance. The sector is enjoying a combination of easily available funding at low interest rates and strong lease yields, while it’s airline customers benefit from record profits, lower fuel costs and strong air travel demand.
Alaska Air Group ups merger synergy targets as the margins for 2017 compress
Alaska Air Group has revised projected synergies from its merger with Virgin America upwards in both costs and revenue as it leverages the power of a larger network with a broader footprint in California, and uses the combined fleet to maximise profitability on transcontinental routes by placing higher gauge aircraft in those markets.
The existing Airbus narrowbodies operated by Virgin America will remain in the combined airline’s fleet for the foreseeable future. As a result, those aircraft are being reconfigured to offer standard interiors, including Alaska’s first class seat.
Similarly to Virgin America prior to the merger, Alaska has decided that a lie flat seat offering does not fit into its strategy in the contested US transcontinental market. In fact, choosing not to develop a lie flat product could put Alaska in a more favourable position when an (inevitable) economic down cycle occurs.
Despite the more favourable synergy estimates, Alaska will face some margin pressure due to Virgin America’s overall lower margin business. However, even though its margins are likely to drop in 2017, Alaska is stressing that its pretax margin performance will best the industry average.