Airbus Updates No.2792

Virgin Atlantic To Delay Airbus Aircraft Deliveries

Virgin Atlantic will be delaying the delivery of some aircraft from Airbus. According to major leasing company Air Lease Corporation, the leased aircraft will arrive at Virgin before the ones it is buying from the manufacturer, although those too are likely to be pushed back slightly.

Airbus deliveries delayed

During the recent earnings call from Air Lease Corporation (ALC), it was revealed that UK long-haul airline Virgin Atlantic is planning to delay some deliveries of aircraft, particularly those coming directly from Airbus. The major lessor has no aircraft placed with Virgin at the present time but has a number of widebodies scheduled in for delivery in the future.

With a vested interest in the future of Virgin, ALC has been closely involved in the current restructuring at the airline. Virgin Atlantic filed under Chapter 15 at the beginning of the month, and has been undergoing a pre-packaged stay and reorganization since then. Speaking at the earnings call presentation, CEO and president John Plueger explained,

“We have no aircraft at that airline today. However, we do have widebody aircraft scheduled for future delivery through 2024. As such, ALC is fully participated in the restructuring, and we do expect those aircraft to deliver as planned as the airline deems our new aircraft integral to their recovery and environmental sustainability goals.”

 Although Plueger stated that deliveries would proceed as planned, he also noted that some requests for deferrals had filtered through. Being pressed on the point, executive chairman of the board, Steve Udvar-Hazy clarified that some of the deliveries had been delayed. He said,

“…some of our deliveries have been rescheduled. But most importantly, their direct buys were rescheduled to later time frames, which means the airline has to pay less in fee delivery deposits to Airbus, and therefore, they can protect their cash liquidity position.”

Virgin has orders in for 14 Airbus A330neo aircraft, with a further six options. Deliveries were proposed to begin in 2021, but this will likely now be pushed back. At the same time, the airline has eight more A350-1000s on order from Air Lease. While they may be taken later than originally planned, they will still arrive ahead of the A330neos.

Good news for Virgin

While delaying delivery is never good news, for Virgin Atlantic it is a solid strategy to preserve cash. Leased aircraft will allow it to maintain capacity on key routes, using newer, more efficient models, without the large payments to Airbus for aircraft it plans to own outright.