The grounding of the Boeing 787 is lifting demand for Airbus A330s and Boeing 767s, according to Jeffrey Knittel, CIT Aerospace president-transportation finance.
Briefing media at the ISTAT Americas 2013 conference in Orlando Tuesday, Knittel said the 787 issues made it a “difficult time” for Boeing and the entire industry, but he said he was confident of the OEM’s proposed solution for the lithium ion battery problem and he said the fix would be permanent and ensure long-time operation of the aircraft.
CIT Aerospace has 10 787-8s on order and is expecting its first delivery in late 2014. Knittel said there was a very real demand for the aircraft in the market and CIT is considering accelerating its delivery positions forward.
Knittel said none of CIT’s 787 customers had requested any changes to their orders since the aircraft was grounded in mid-January. “Boeing has done a good job of finding a solution and [Boeing Commercial Airplanes CEO Ray Conner] has done a good job of outreach to the customers. We feel very confident that we have a pulse on where things are going,” he said. “Demand for the airplane is there, so when the solution is arrived at and agreed to by all prevailing agencies, we will move forward.”
“A handful” of 787 customers have been in talks with CIT over alternative short-term plans should the problem not be alleviated in the near term; however, Knittel said it varied from airline to airline and “people are being prudent; it is not a feeding frenzy.”
He added, however, that lease rates remained strong “and have probably strengthened slightly on the A330 and 767. We are one of the owners of the A330 and demand for that airplane has gone up, and somewhat for the 767 as well, with the 787 issue. [Demand for] the A350 has slid a little bit,” Knittel said.
CIT also has 15 Airbus A350-900s on order, and Knittel cautioned that Airbus’ decision to revert to a traditional ni-cad battery for the A350 XWB program was no reflection on its opinion of the new technology associated with lithium ion batteries, but rather a way to de-risk the program. “Airbus had the opportunity because of the timing that allowed them to de-risk the program and I think that is prudent,” he said.