ISTAT Jetrader - Winter 2022 - 17

global traffic volumes, but the most
recent revision projects achievement of
2019 levels on a monthly basis in final
quarter 2023. "
ABOVE: The Lessor CEO Panel, from left: Douglas Runte (moderator), Andy Cronin, James Meyler,
John Plueger, Firoz Tarapore and Otto Verhoeff.
" COVID turned cargo into a fairly heroic
venture for a while. It also changed the dynamics
of belly- dedicated freighters. Then Ukraine/Russia
has changed things again. "
actual increases we're seeing. " The
cost pressures are definitely going to
manifest, " he said.
Macroeconomic Update
Rob Morris, global head of consultancy
at Ascend by Cirium, provided a
macroeconomic update, which he
said would be more fittingly titled
" Shining a Light Through the Fog. "
He summarized the macroeconomic
indicators as follows: " GDP growth
projections have weakened through
2022, and the outlook for 2023
is increasingly pessimistic. The
Purchasing Managers Index (PMI) trend
is negative with Eurozone and global
composites now below 50, signaling
expectation of a recession. The WTO
Goods Trade barometer is on trend but
with a negative outlook in two sectors,
including air freight. Inflationary
pressures are driving up interest
rates and airline ticket prices. High oil
prices may be easing a little but are
still significantly up year-over-year
and driving increasing jet fuel prices,
which will also see further pressure
from sustainability stringencies.
New aircraft prices may increase
significantly due to OEM escalation and
interest rate increases. Airlines face
an increasingly uncertain demand and
cost environment. "
He also outlined operational
indicators, which include an overall
positive recovery trend through 2021
that continues through October 2022
following the omicron-induced stall in
January 2022. Additionally, " parked
inventory continues to reduce and now
stands around 1,600 aircraft more
than when all this started, " he said.
The volume of new leases for used
aircraft are recovering to pre-pandemic
levels. There is Market Value recovery
in progress for single aisles, and twin
aisles are also on a positive trend.
Market lease rates are also in recovery
for single aisles.
In conclusion, Morris said, strong
demand recovery continues in most
regions. Ascend by Cirium's recovery
scenario " continues to marginally lag
Freighters
Up next was the Freighter Panel,
moderated by Gary Fitzgerald, CEO
of Stratos. The panel included Mike
Berger, chief commercial officer at
ATSG; Geoff Kehr, senior vice president
of global air fleet management at DHL;
Wolfgang Schmid, vice president of
sales and marketing at EFW; and Guy
See, managing director of aircraft
acquisitions and sales at FedEx.
Prior to COVID-19, Fitzgerald began,
cargo was pretty niche. " COVID turned
cargo into a fairly heroic venture for
a while. It also changed the dynamics
of belly-dedicated freighters. Then
Ukraine/Russia has changed things
again. " Each panelist spoke briefly
about how their companies have
adjusted to the changes in the market,
but the bulk of the discussion focused
on questions from the audience.
One question was " Do you have
a preference between an A350 and a
777-8F? "
Kehr said he is excited about both
because of new technology. " The
specs of both aircraft are promising.
It's too early for us to decide which
has the right economics, but we will be
introducing new sustainable long-haul
aircraft into our fleet. We may end up
having both in the fleet, " he said.
See agreed that it's " too early for us
to take a side here, " and Berger said,
" This one's easy for us; we're not into
either. They are both going to be great,
but for us, we've focused on the 767 for
a long period of time. We'll deliver our
first A321s this year. We're happy we've
secured conversion spots for 330. 350
and 777 right now are something we've
purposely stayed away from. "
Another question from the audience
involved OEM-sponsored conversions:
" What's your view on what is good or
isn't good? "
* WIN TER 2022 * 1 7

ISTAT Jetrader - Winter 2022

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