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Air Lease sounds alarm over future of delayed Boeing 777X

Air Lease chairman sees risk to Boeing 777X project from delays
Air Lease chairman sees risk to Boeing 777X project from delays   -   Copyright  Thomson Reuters 2022
By Reuters

By Tim Hepher and Padraic Halpin

DUBLIN -Boeing Co suffered a fresh setback to its delayed 777X jetliner project on Monday when one of the aviation industry’s most influential executives, leasing veteran Steven Udvar-Hazy, said its future could be at risk.

The U.S. planemaker last month pushed back first delivery of the world’s largest twin-engined jetliner by more than a year to 2025, five years after it was originally due.

Asked if he saw risks to the future of the 777X programme from the delays, Air Lease Corp’s executive chairman, Udvar-Hazy, said “yes.”

Pressed on whether it was possible the whole programme could be cancelled, Udvar-Hazy, widely seen as the father of the modern leasing industry, said that would depend on what the Boeing board looks like in 18 to 24 months.

“What I’m saying is that those decisions whether to continue with the programme or not, it will probably not be made by this board of directors anyway,” Udvar-Hazy told the Airline Economics conference in Dublin.

A Boeing spokesperson referred to comments last month by Chief Executive Dave Calhoun, who said, “We’ve got to give ourselves the time and freedom to get this right.”

Chief Financial Officer Brian West told Boeing investors last month it is “highly confident in this (777X) family of airplanes.”

The head of the world’s largest lessor, AerCap Holdings NV, said on Monday he believed Boeing would “bounce back.”

Plans to update the 777 mini-jumbo with a larger 400-seat version using more efficient carbon-fibre wings and new systems have been hit by certification problems, industrial delays and waning demand for the biggest jets.

787 DELAYS

Air Lease Chief Executive John Plueger told a separate session of the same conference on Monday: “One has to question a little bit the 777X programme and its viability.”

He added that Air Lease had received requests from two airlines that are current or potential 777X customers about availability of the Airbus A350 since Boeing announced the fresh delay, though he was unsure if the moves were linked.

Udvar-Hazy said Air Lease had considered buying a recently announced freighter version of the 777X but had decided not to do so because there were “too many questions and delays.”

Air Lease became a launch customer in November for a rival new Airbus A350 freighter version, though Boeing leads in the order race for the two models after a deal with Qatar Airways.

On Monday, Germany’s Lufthansa said it would buy seven 777X freighters, also known as 777-8F.

The two leasing executives also voiced frustration over paralysis affecting the smaller Boeing 787, which has not been delivered for a year as Boeing discusses production flaws with regulators.

“I have never seen anything like (it),” Udvar-Hazy told the Dublin conference, noting that airlines can cancel airplanes once they are a year late.

Plueger said one airline had filed such a cancellation for a Boeing 787 in the past week.

He did not rule out further delays to Airbus’ new A321XLR after the European firm announced a three-month delay last week.

Plueger said the delay could become six or nine months, but was unlikely to reach a year or two.

Airbus wants to rely on the housing of the plane’s engines to absorb some impact in the event of a crash landing but regulators are insisting on strengthening its redesigned fuel tanks to absorb the full impact and prevent fire, Plueger said.