According to a report yesterday, Airbus has managed to sell six A320neo aircraft that were rejected by one of its biggest customers. Despite the slump in manufacturing and a surplus of aircraft caused by delayed and canceled orders in the wake of the coronavirus pandemic, Airbus has found buyers for all six jets, the last of which will be delivered this month.
Airbus finds buyers for surplus aircraft
Reuters reported on Friday, November 27, that Airbus has sold six surplus A320neo jets that the original buyer failed to take delivery of. The jets were built for Malaysia’s AirAsia but, after giving up on the airline taking delivery of them, the manufacturer put them up for sale in April in the hope of finding buyers for them.
As with other airlines striving to cut costs amid crippling lockdowns and travel bans, AirAsia said in April that it didn’t need any more planes this year and would be reviewing future orders. While manufacturers can show flexibility on the delivery of planes that haven’t yet been built, they usually insist on customers taking delivery of aircraft that have been produced for orders.
So-called “Pop-up” sales of unwanted planes are not unheard of, but they don’t usually involve such high-profile clients. With rejected orders, the manufacturer would typically keep the deposit, although Airbus did not comment on whether it has done so on this occasion. An Airbus spokesman told Reuters,
“We do not disclose or comment on delivery schedules for any customers.”
A European industry source told Reuters that Airbus has now found homes for all six, four A320neo and two A321neo aircraft, the last of which is being delivered this month.
Simple Flying reached out to Airbus for comment, but a spokesperson told us,
“We have nothing more to add, our contractual talks with customers we keep confidential.”
Pop-up sales risk reducing aircraft values
Airbus’s move to re-sell the six AirAsia A320s was seen as a risk during the current crisis. While it would partly protect the manufacturer’s investment, it could lead to pressure from other clients to find new buyers for aircraft they no longer want. That could trigger wider sales of undelivered planes a cut prices, which could set a precedent for future prices.
The UK-based consultancy IBA Group says that all aircraft have lost some value during the COVID-19 crisis. However, the A321neo is trading around 5% below its inherent value, while the Boeing 737 MAX is 10% below, with values also damaged by the recent grounding.
Boeing is expected to re-sell many 737 MAX aircraft whose buyers canceled during its grounding, potentially depressing prices even further.
Airbus sees strong A320 demand
Despite the battering the aviation industry has taken this year, Airbus is experiencing relatively strong demand compared to the rest of the sector. In particular, the A321neo has largely held its value, and the manufacturer is sticking with plans to increase production of the A320 family of aircraft in 2021.
However, doubts continue about the demand for the larger A330neo. AirAsia’s long-haul sister airline, AirAsia X, the largest customer for the aircraft, is looking for new funding to help it survive the crisis.
What do you think about Airbus’ sale of undelivered aircraft?