Spanish flag carrier Iberia has rescheduled orders of 11 A320neos and 13 A350s as well as announcing the accelerated retirement of its entire A340-600 fleet.
Iberia hasn’t announced details of the new delivery date but it piles on more pressure onto airframe make Airbus with Global Data’s aerospace and defence analyst Nicolas Jouan predicting further deferrals would be in the pipeline from other carriers.
“More deferrals will be hitting Airbus’ order book after Iberia decided to postpone deliveries of A320neo and A350. It is a blow for the European plane maker that still has 11 A320neo and 13 A350 in its order book for Iberia.
The actual delay has not been announced yet by the airline, but it is likely to result in at least several years of delay in order to assess the potential of recovery for a post-COVID-19 air travel industry.
Such deferral is far from unique in the current situation, as we have seen two weeks ago with the postponing of 68 B737 MAX from SMBC Aviation Capital until 2025 at least. A five-year delay seems a credible time frame to securely assess the market recovery and avoid overcapacity.”
Recently a Jefferies analyst report described Iberia’s parent, IAG, planned fleet reductions as “drastic” and this was confirmed by Iberia’s chief executive Luis Gallego who told a business conference in Madrid that the carriers fleet is going to be smaller I future, “it is not temporary but structural,” he said.
The news that that the airline would bring forward the retirement its final 14 Airbus A340-600 aircraft was given to staff in an internal memo.
Iberia was one of the last European airlines still using the A340 and the end of this aircraft’s service life has been long expected but Jouan said Iberia’s deferral move showed that the European airframe maker was potentially as exposed to the downturn as US rival Boeing.
“Airbus’ platforms such as the A320 family are normally considered less exposed than Boeing’s to deferral, especially regarding the B737 MAX and its uncertain future. The plane is still grounded after two successive crashes in 2018 and 2019 and has been hit with significant cancellations since the beginning of the crisis. Companies such as Air Canada or Air Lease Corporation even cancelled MAX orders in massive proportions earlier this year without even directly invoking COVID-19.
But even Airbus’ healthier A320neo, A330 and A350 have seen their production rates cut by 40% to face the crisis. A growing list of airlines and leasing companies have decided to adopt a fiercely risk-averse strategy. More deferrals, and therefore production cuts, are to be expected from Airbus and Boeing, regardless of the model,” he said.