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An expert's perspective on aircraft orders: John Plueger, ILFC
01 March 2008
John Plueger, ILFC's president and chief operating officer, talks about aircraft orders and the lessor's plans to acquire new aircraft.
Airfinance Journal: Where are we in the cycle?
Plueger: This industry has always been cyclical. There has been an aircraft orders frenzy and a herd mentality about rushing in. People think, 'if I don't get in, I won't be able to secure positions.' That phenomenon was clearly evident with Airbus and Boeing's order books at the close of 2007, when both manufacturers had record years.
Today, I think we are seeing economic uncertainties in the worldwide financial markets with a tightening of credit. There have certainly been continued ramifications in North America from sub-prime, which are likely to impact discretionary travel.
Price elasticity has reached its maximum and airlines have been adding surcharges for fuel. At some point passenger numbers are affected. We're starting to see that on the transatlantic routes and within the US.
We've clearly had a major run up of orders in the past couple of years,...
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