Air Transport

Significant aircraft order cancellations are in the offing, predicts a respected inudstry analyst, who has raised particular concerns about the rapid growth of Gulf carriers.

Avitas senior vice-president Adam Pilarski told delegates at the International Society of Transport Aircraft Trading (ISTAT) conference in Orlando, Florida, that the industry is in "a bubble environment" and that bubble "will burst".

Pilarski says the question remains of when these cancellations will begin. But the reason is already evident, he notes, as Middle Eastern carriers have ordered more aircraft than required.

"Expect sizeable cancellations," he warns.

Dubai's plan "assumes people going to Germany from Australia will be through Dubai". Because of this "double-counting", orders are outstripping true necessity, Pilarksi explains.

He compares the situation with the crash of 20 years ago when "the bubble burst because we had double counting on orders. Airlines continued to order, but so did the operating lessors. Operating lessors forgot to tell the airlines not to order aircraft and this resulted in many orders for the same demand."

Pilarski's predictions come shortly after the head of International Lease Finance Steven Udvar-Hazy estimated that no more than 75% of the current order book is "rock solid".

Udvar-Hazy believes airlines will ultimately try and determine what they can absorb and once those "reality checks" are performed more frequently, major adjustments will occur.

Twelve of 15 A318s ordered by America West Airlines prior to its merger with US Airways have been dropped from the Airbus orderbook. America West originally ordered 15 Pratt & Whitney PW6000-powered A318s, but these have never been delivered. Airbus's latest order figures reflect Italian carrier Eurofly's cancellation of its original agreement for three A350s. Airbus has previously indicated that it expects to take A330s instead.