LEITHEN FRANCIS / SINGAPORE
Airbus likely to bear the brunt of deferrals as capacity cuts hit Chinese carrier
The aviation downturn in Asia caused by the outbreak of the SARS virus has forced one of mainland China's largest carriers, China Eastern Airlines, to seek delivery deferrals for aircraft due this year.
Airbus would suffer most from any deferrals, with the airline due to receive 12 of its aircraft this year, including a first batch of A340-600s. The Shanghai-based airline took delivery of six aircraft earlier this year, but does not want the remaining 13 due in 2003 because the SARS outbreak has led to cuts in capacity.
"All deliveries [remaining] this year we are trying to delay to next year," says China Eastern. It is considering deferrals because load factors on international routes are averaging 30% compared with last year's 60%. This is despite the airline reducing capacity on international and Hong Kong routes by 30% since the SARS outbreak.
According to the Airclaims CASE database, the 13 aircraft due for delivery to China Eastern this year comprise nine Airbus A320s (including one to be leased from GE Capital Aviation Services), three Airbus A340-600s and one Boeing 737-700 leased from International Lease Finance. The airline's first A340-600 is completed and being prepared for delivery in Toulouse.
China Eastern has reported a first-quarter net loss of 171.45 million yuan ($20.7 million) and warns that the SARS outbreak will have an impact on its financial position in the second quarter.
It is unclear whether other mainland carriers will follow China Eastern on deferrals, but there are indications that some will. Air China is reportedly contemplating a move to delay deliveries, although a source in the airline says it plans to take all 10 aircraft due this year, including three Airbus A319s, three Boeing 737-600s, three 737-700s and one Tupolev Tu-204-120C.
Source: Flight International
