Get the app today! Download iPhone App Download Android App

SUBSCRIBE

Airbus Says Low Oil to Fund Fleet Renewal , Not Save Older Jets

Published on Dec 22 2014 10:46 AM in General Industry

Airbus Says Low Oil to Fund Fleet Renewal , Not Save Older Jets

Airbus Group NV said the lower oil price won’t hurt demand for more-efficient new jets, with improved profit margins from flights using older planes serving to help airlines generate the funds needed for fleet renewal.

Operational savings of about 25 per cent from aircraft such as the A350 wide-body, handed over to first user Qatar Airways today, are “a must” for carriers even with crude around $60 a barrel, Fabrice Bregier, head of Airbus’s airliner unit, said.

“And with fuel prices getting lower, airlines have better margins so more capacity to fund aircraft,” Bregier said in an interview in Toulouse, France, where Airbus is based. “All in all I don’t think it will have any impact on us.”

With an order backlog of 780 A350 jets, Airbus’s challenge remains to ramp up production as fast as possible to meet those commitments, according to Bregier. The first available delivery slot for the new model is not until 2021, when there’s in any case zero visibility over the price of oil, he said.

Qatar Airways CEO Akbar Al Baker said at the handover ceremony that airline-industry profitability remains so thin that planes with reduced fuel burn are vital.

“Airlines have very small margins and very small upheavals around the world affect the travel business,” Al Baker told Bloomberg Television.

Bloomberg News edited by Hospitality Ireland

Share on Facebook Share on Twitter Share on LinkedIn Share via Email