Airbus faces A330 delivery delays amid HNA Group woes — Reuters sources

This photo taken on July 10, 2018 shows the new Airbus A220-300 parked on the tarmac on July 10, 2018 at the Airbus delivery center, in Colomiers southwestern France. (AFP / PASCAL PAVANI)
Updated 12 July 2018
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Airbus faces A330 delivery delays amid HNA Group woes — Reuters sources

  • Companies belonging to the troubled Chinese aviation-to-finance conglomerate have delayed payments for several months, leading Airbus to withdraw deliveries, the sources told Reuters.
  • “After six months of talks, Airbus took the decision to withdraw the planes as it does not want to play the financier,” said a person familiar with the discussions.

TOULOUSE, France: Airbus faces a logjam of undelivered A330 jets worth well over $1 billion for airlines affiliated to China’s debt-laden HNA Group following a stand-off over late payments, according to industry sources and a Reuters examination of parked aircraft.
Companies belonging to the troubled Chinese aviation-to-finance conglomerate have delayed payments for several months, leading Airbus to withdraw deliveries rather than step in to finance the aircraft itself, the sources told Reuters.
“After six months of talks, Airbus took the decision to withdraw the planes as it does not want to play the financier,” said a person familiar with the discussions on Wednesday.
However, another person involved in the matter cautioned: “It is in the process of being resolved.”
An Airbus spokesman said: “We keep our talks and contractual terms with customers confidential.”
HNA had no immediate comment.
The cluster of undelivered A330 aircraft came to light on the sidelines of a ceremony to present Airbus’s smallest new jet.
Reuters journalists counted five A330s dotted around the delivery center and another parked further away — some with reflective sunshade protectors taped to the cockpit windows and all painted in the flame-red liveries of HNA Group airlines.
These include Hainan Airlines, Beijing Capital Airlines and Tianjin Airlines.
Six A330s would cost a total of $1.6 billion at list prices.

Turbulence
Various semi-finished A320s could be seen parked, though it was impossible to tell whether these were grounded for the same reasons or because of a wider problem of engine shortages for such planes. Airbus has had a stockpile of up to 100 undelivered single-aisle jets, but said last week this had fallen to 86.
The wide-body A330 aircraft has no such engine supply problems and it is the backlog of those more expensive planes that is causing most concern, the sources said.
An aircraft finance source estimated the total financial burden of holding such an asset, in terms of lost value and the cost of storage and maintenance, at $10,000 per plane per day.
Airbus is already having to handle cash shortfalls from the late delivery of dozens of A320 aircraft.
Unraveling the situation could be made more difficult by the death last week of HNA Group chairman Wang Jian, a financial source said, though HNA quickly named co-founder Chen Feng as sole chairman of the highly centralized group.
Wang, regarded as the architect of HNA’s $50 billion acquisition spree that pushed it into debt, died in southern France on July 3 in what local police said appeared to be an accidental fall from a wall while posing for a photograph.
His death complicates the troubled conglomerate’s efforts to restructure and pay off borrowings, and could increase pressure on HNA to reveal more about its oft-criticized opaque ownership.
“Anything like this creates turbulence, so things are difficult with HNA,” the financial source said. Another industry source stressed Chen was nonetheless a heavyweight figure.
Financial sources said earlier this year that some airlines linked to HNA were delaying aircraft lease payments to lessors.
Some of the sources said HNA’s flagship Hainan Airlines and smaller ones including Lucky Air and Beijing Capital Airlines had missed payments, while Tianjin Airlines was seeking to extend the term for payments due this year. (Reporting by Tim Hepher; Editing by Mark Potter)


Boeing kickstarts Farnborough Airshow with order for jets worth $4.7bn

Updated 16 July 2018
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Boeing kickstarts Farnborough Airshow with order for jets worth $4.7bn

BENGALURU: Boeing Co. said on Monday it won an order for 14 freight aircraft for a value of $4.7 billion, firing the opening salvo against rival Airbus in a contest for business on day one of the Farnborough Airshow.
Logistics group DHL placed the order for the 777 freighters and acquired purchase rights for seven more freighters, the US planemaker said.
Boeing and Airbus are expected to make several announcements on the first day of the July 16-22 event, as they seek to bolster their already bulging order books.
The latest order follows Boeing’s deal with FedEx Corp. unit FedEx Express in June for 24 medium and large freighters.
While global trade tensions are escalating, the industry is counting on e-commerce continuing to soar, with more people buying products online for quick delivery.
Air freight demand is expected to increase 4 percent this year, according to the International Air Transport Association (IATA).
Last year was the best for cargo since 2010, with traffic growth more than doubling to 9 percent, three times the growth in capacity.
Boeing’s latest order will double the size of DHL’s global 777 fleet, the companies said. The delivery of the first four planes is expected to be completed in 2019, DHL said in a separate statement.
The Farnborough Airshow is the industry’s biggest event this year. It alternates with the Paris Airshow and, collectively, they account for over a quarter of industry order intake each year.