As EL AL have to ground its new 787s to have the engines overhauled, the Farnborough Air Show rumbles on. Make no mistake the story affecting the entire make-up of the commercial aviation sector at this time is one of new engine problems across the board and the capacity of OEMs and MROs alike to deal with the influx.
But back at Farnborough, the rather weary participants on the show ground were somewhat intrigued by the VietJet MOU for 80 737 MAX 10 and 20 737 MAX 8 aircraft. The airline already has around 100 MAX 10s yet to deliver. There is no way that VietJet can throw 200 737 MAX aircraft at the Vietnam and Thai markets when there are already well over 300 MAX and NEO aircraft to deliver into those markets with direct competitors on order right now. Maybe VietJet thinks that Lion, AirAsia etc. will not succeed or maybe VietJet wishes to further increase exposure into the leasing side of the business? With the huge Aviation Capital Group and Air Lease Corp MAX orders it should be that the wait for these aircraft makes putting a marker in the sand now via an MOU for a large block of the same both a logical and needy requirement – I would argue that this is the case here. Boeing is also throwing in pilot training as part of deals lately, that does indeed count for something if carried over into the future on a current MOU. Either way for those investors looking to Boeing right now, this MOU should count for little in the immediate term.