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- As airlines have exited the COVID-19 trough bringing aircraft out of storage, TAC Analysis examines the new shape of the global fleet. Airlines are prioritizing cash management over aircraft size and performance.
- Commitments to take new aircraft are currently guiding the reduced fleets, however a hesitancy to enter new commitments amid a plentiful used aircraft market will likely suppress new orders and production for years.
- The long term consequences will ripple across the value chain as used aircraft values remain depressed, new aircraft production slows, and the financial community works to balance the new dynamics.
Describing the Golden Age of airline travel no longer refers to the time of passengers in suits and dresses, extravagant meals, flowing champagne, and flight attendants in hats — a nostalgia that spanned half a century. Today, the Golden Age nostalgically refers to the time of passengers without face masks, bags of pretzels, free coffee, and flight attendants without hazmat suits. A nostalgia that spans as far back as the halcyon days of February.
But that more-recent Golden Age was also an opportunity to leverage an industry’s relative stability to make long-term decisions. The chaos of the COVID-19 world is the uncertain middle-ground that the airlines find themselves in today. No longer are airlines scrambling to park airplanes as demand collapses in the short term, however, nor are they able to optimize for a fleet of aircraft needed over the next five, let alone 10 or 15 years.
Related: The airplanes that have survived the aviation apocalypse
In April, TAC Analysis examined the changes in the global fleet — the airplanes that had survived aviation’s apocalypse — as the industry entered the trough of the crisis. Today, in August, further down the roller coaster, airlines are further evolving how fleets are being used, providing clues to what aircraft demand and values may bring in the coming decade.Continue Reading...