Trouble in Turkey

Eleanor Steed
By Eleanor Steed October 10, 2016 18:05

Trouble in Turkey

As reported would be the case right here eight months ago, the airlines in Turkey are scaling back on the back of international/ regional and domestic war and terrorism risk.

Pegasus is looking to lease aircraft to improve overall utilization and that ties in well with what we stated here on Friday last with regard to narrow body aircraft availability risk in the leasing sector over the coming years.

THY is to reschedule deliveries of 65 737-8 Max, ten 737-9 Max, and 92 Airbus A321Neos that were previously slated to enter into service by 2020. THY will take delivery of only ten aircraft during 2018 from what was 34. THY has also deferred five deliveries during 2019 and another ten deliveries during 2020. The airline did not announce any changes in aircraft deliveries during 2021; however, it plans to take six more deliveries during 2022.

Pegasus Airlines has looked to place much of its A320-200s and Boeing 737-800s out on lease of late and, if reports are confirmed that the entire fleet is up for grabs, it will put huge pressure on A320 and 737 800 lease rates in the short term, but in the event it might just hinder Max and Neo lease rates more than ceo and NG.

The THY deal with Boeing should be good for lessors. The lessors wishing to flip A320 orders to A321s now have good slots to take and the same goes for Boeing’s lessor customers looking to convert MAX 8s to 9s. All the while THY is able to manage its fleet growth through the current testing business environment.

Meanwhile, Boeing has been busy assisting Monarch in the UK, whose licence runs out at midnight on Wednesday.  You will recall that Monarch was given 12 days to finalise its new funding arrangements and one of the sticking points was its aircraft delivery schedule and freedom for the airline to sell and leaseback the aircraft. Boeing it is reported has stepped-in to help with a revised fleet purchasing deal that will secure the financing before the deadline. Under the agreement, Monarch will be able to enter into sale-and-leaseback arrangements for all 30 aircraft on firm order. The terms will form part of a £165m investment package that will see Greybull Capital inject new funds into the firm.

Market movements do not stop there though. The wish of the Kremlin to re-organise Russian airlines into one mighty Aeroflot of old took another step to reality over the weekend as it was announced that a new Russian passenger airline is slated to start operations in 2017, which will better connect regions in the south and center of Russia using ten SSJ100s. The Russian transport ministry is inviting private companies to invest in the new firm, but it will provide financing to acquire the aircraft through the State Transport Leasing Company (GTLK). This airline will not be able to make money but it will put pressure on S7 and that might be the primary purpose of this venture in the long term – Watch this closely.

Eleanor Steed
By Eleanor Steed October 10, 2016 18:05