Aircraft

No more than 75% of today’s orderbook is rock solid: ILFC's Udvar-Hazy

By Laura Mueller

Aircraft manufacturers should brace themselves for some difficult times ahead as customers begin to take a second look at the aircraft orders they placed during the past few years.

"Starting from today, no more than 75% of the orderbook is rock solid," says Steven Udvar-Hazy, chief executive of International Lease Finance. "The rest is flaky or could disintegrate rapidly to become flaky and would be subject to deferral and cancellation.

"Boeing and Airbus want to put off the day of reckoning as long as they can, but it is coming. Airlines will start looking in the mirror every few months and ask: 'What can we really absorb here?' Once those reality checks are done more frequently, we will begin to see some major adjustments on a macroeconomic basis."

Udvar-Hazy says that during the Singapore Airshow, manufacturers "turned up the intensity to a significant degree" in search of orders from ILFC. He believes this is partially due to concern about the current orderbook.

"In the long term, I am still confident that the industry is very much part of our global economy, but I am not as bullish about the next couple of years."