ISTAT Jetrader - Summer 2020 - 15

so the manufacturers
are going to cut back
production, and that will
be part of the solution.
We're going to return to
a balance between the
number of airplanes we
have in the fleet and the
number of people who
want to travel.
ISTAT conferences
are fun because you have
people who say everything is hunky dory and nothing can go wrong, and then you
have some people who are "Dr. Doom." When there is a downturn, Dr. Doom can
say "Didn't you listen to me last year?" The reality is nobody knows when these
events will strike. But there was a general uneasiness about how many years this
upturn from 2009 had continued. Normally, the cycle is 10 years. It would be about
two or three years from peak to trough, then seven or eight years for the market
to build back up again to the next peak phase. So, on year eight or nine, people
started to say "This is where the cycle is supposed to turn down." In 2019, there
was less traffic growth than we saw in 2018 and 2017. It should have been matched
by lower production rates, but what happened in March 2019 was the MAX was
grounded and Boeing stopped delivering them. So, that corrected the capacity
imbalance that was emerging, which made 2019 look OK even though it shouldn't
have. A lot of people were concerned that, come 2020, Boeing was going to get
the MAX back in the air and then 700 aircraft would be delivered in addition to
the very high production rate Boeing planned, so there was going to be a flood of

airplanes, and people wondered who
was going to need all those airplanes.
Then the virus happened, which made
everything worse.
Jetrader: What advice would you
give to someone just coming in to
the field?
NH: Unfortunately, some of the kids
now looking for jobs in this market will
have to be patient, because there's
going to be some sorting out to be done
in the coming years. But, eventually,
we're going to need a lot of young and
bright people out there. I started in this
business in its infancy when I came out
of school, and so did many others in the
business. It's encouraging for people
coming into the industry now. They have
the benefit of learning from the current
downturn. I started in 1984, right in the
middle of a deep cyclical trough from
the second OPEC crisis. It was a very
expensive education, but the lessons
were valuable. Here we are at such a
teaching moment again!
Jetrader

* SUMMER 2020 * 1 5
ISTAT Jetrader - Summer 2020

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