Inflation Hits New Aircraft Deliveries: Escalating The Problem Or Inflating A Solution?

Inflation Hits New Aircraft Deliveries: Escalating The Problem Or Inflating A Solution?

Boeing 737 Max airplanes sit parked at Boeing Field on November 18, 2020 in Seattle, Washington. Aviation has been on a roller coaster. We have experienced the biggest drop in demand in its history and many airlines have had to make many adjustments to survive. While there has been a positive impact from the recent uplift in the Americas travel markets, Europe has been a case of starts and stops. Similarly, the Asia market had recently reopened a lot of previously closed borders to attract more traffic, but there are still areas with tougher measures in place to prevent Covid which are weighing on the recovery. Inflation plays a role in almost every segment of the aviation industry. It affects the price of aircraft, debt; overall operations of the airlines and other aviation participants. One of the largest components of the cost base of an airline; other than fuel, is the aircraft itself. Inflation is exhibited through the steady increase of the official aircraft list prices of the predominant manufacturers (Boeing and Airbus) and their suppliers, which we see publicly. Manufacturers routinely raise their prices in the normal course of their business. One aspect of this is due to the