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<Research>G Sachs Expects CN Authorities' Request to Halt Aircraft Deliveries from Boeing to Aggravate Capacity Shortages of 3 Big Airlines
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The Chinese authorities reportedly asked airlines to suspend receiving any aircraft deliveries from Boeing, and instructed airlines to stop purchasing any US aircraft-related equipment and parts, Goldman Sachs issued a research report saying. CHINA SOUTH AIR (01055.HK) has halted the sale of 10 second-hand Boeing 787s at the Shanghai United Assets and Equity Exchange on 11 April, which is believed to be a rearrangement of capacity amid the uncertainty of the delivery of new aircraft, the broker noted. Goldman Sachs added it would be difficult to comment and adjust its forecasts before the official position is released. However, considering that about 33% of the new narrow-body and wide-body passenger aircraft to be delivered in 2025-2027 under the order plans of CHINA SOUTH AIR, AIR CHINA (00753.HK) and CHINA EAST AIR (00670.HK) will come from Boeing. If the report is accurate, this would reduce the net aircraft addition of the 3 big airlines from approx. 4-5% to 2-3% from 2025 to 2027, and the CAGR of seat capacity is expected to fall from 3% to 2%. Assuming no change in demand, Goldman Sachs expected the shortfall in capacity supply faced by the 3 big airlines to intensify from the original expectation of demand exceeding supply by 3% to 4%, with CHINA SOUTH AIR anticipated to be the most affected due to the largest exposure to new aircraft on order from Boeing. AAStocks Financial News |
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