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Aircastle set to buy 38 aircraft (UPS to lease 12 747-400F to replace A380F)
Financial Times ^ | Published: January 23 2007 02:00 | Last updated: January 23 2007 02:00 | Doug Cameron

Posted on 01/23/2007 12:35:09 PM PST by Paleo Conservative

Aircastle, the only listed aircraft leasing group, yesterday announced plans to buy 38 aircraft from a Chicago-based investment group for $1.6bn, in a move which highlights the improving prospects of the cargomarket.

The portfolio includes 12 Boeing 747-400 freighters, the largest commercial cargo aircraft, with UPS expected to confirm this week that it has cancelled the sole remaining order for the Airbus A380F.

The proposed deal will almost double the size of Connecticut-based Aircastle, which was floated last year by Fortress, the private equity group.

The company is buying the 12 cargo aircraft and 26 passenger aircraft fromGuggenheim Aviation Partners to add to an existing portfolio valued at $2bn.

Steve Rimmer, Guggenheim Aviation's chief executive, described the move as an "opportunistic sale", though the group will remain in the sector through a fleet of 19 aircraft which it owns or has on order.

Aircastle described the move as "transformational", providing it with scale at a time when leasing companies are expanding their 30 per cent share of the global aircraft fleet as airlines look for more flexible financing options.

The sector is led by General Electric's Gecas unit and the ILFC operation owned by American International Group.

Some executives believe the sector may have reached the top of its cycle.



TOPICS: Business/Economy
KEYWORDS: 747; aerospace; boeing
Sounds like the rumor about UPS cancelling its A380F orders is true.
1 posted on 01/23/2007 12:35:11 PM PST by Paleo Conservative
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To: COEXERJ145; microgood; liberallarry; cmsgop; shaggy eel; RayChuang88; Larry Lucido; namsman; ...

If you want on or off my aerospace ping list, please contact me by Freep mail.


2 posted on 01/23/2007 12:35:48 PM PST by Paleo Conservative
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To: Paleo Conservative

"with UPS expected to confirm this week that it has cancelled (sic) the sole remaining order for the Airbus A380F"

Sacre bleu!!!


3 posted on 01/23/2007 12:37:02 PM PST by Blueflag (Res ipsa loquitor)
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To: Paleo Conservative

Which, it seems, should cause Airbus to re-evaluate that idea. Wasn't the A380F a significantly large part of the program? With no buyers, that could be a problem...


4 posted on 01/23/2007 12:38:35 PM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: Spktyr

Question 1: Can the A380 program be profitable without the A380 Freighter?

Question 2: Does it matter?


5 posted on 01/23/2007 12:44:57 PM PST by bondjamesbond (Have you ever noticed that whatever the problem, the government's solution is always "more taxes"?)
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To: bondjamesbond

Question 0: Can the A380 program be profitable?


6 posted on 01/23/2007 12:46:17 PM PST by ArrogantBustard (Western Civilisation is aborting, buggering, and contracepting itself out of existence.)
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To: Spktyr
Which, it seems, should cause Airbus to re-evaluate that idea. Wasn't the A380F a significantly large part of the program? With no buyers, that could be a problem...

But the cancellation of Fedex and UPS orders for the A380F will open up about 20 early slots for the passenger version. This will cut down on the delays in getting passenger A380's to importan launch customers who are owed compensation for the delays.

UPS must have needed the additional 747's as soon as possible considering they aren't waiting for the 747-8F. They'll now have a fleet of 20 747-400F's. I wouldn't be surprised if Guggenheim Aviation Partners were to place a big order for 747-8F to replace the 12 747-400F slots they just sold (probably for a significant profit).

7 posted on 01/23/2007 12:46:39 PM PST by Paleo Conservative
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To: Spktyr

As I understood it, the A380F design group was also designing the stretched A380.

There were originally three customers for the A380F. FedEx cancelled their order, and Emirates converted their order into pax A380s. UPS was the sole remaining A380F customer, and if they cancel then that will simply move pax aircraft up in the production que.

I read a quote last week when UPS was denying that any decision had been made that UPS was just waiting until they could cancel their order penalty free.


8 posted on 01/23/2007 12:48:39 PM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: ArrogantBustard; bondjamesbond
Question 0: Can the A380 program be profitable?

Unless they sell 900 - 1,000 of them over the next 25 years without spending money to develop improved models and aggressively discounting their prices, they would have done better putting their money in US T-bills.

9 posted on 01/23/2007 12:50:35 PM PST by Paleo Conservative
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To: ArrogantBustard

Shouldn't we spell it "programme"?


10 posted on 01/23/2007 12:50:54 PM PST by bondjamesbond (Have you ever noticed that whatever the problem, the government's solution is always "more taxes"?)
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To: Paleo Conservative

Feh ... I'm seriously dubious of that happening.


11 posted on 01/23/2007 12:53:07 PM PST by ArrogantBustard (Western Civilisation is aborting, buggering, and contracepting itself out of existence.)
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To: Paleo Conservative
Airbus accomplished their goal. They built a plane bigger than the Americans 747.

The problem of course is nobody wants a plane bigger than a 747. Can you say problem identification malfunction!

This plane comes to mind. Maybe they'll build a hanger next to the Spruce Goose so folks can see two very large planes that made no sense what so ever at once.


12 posted on 01/23/2007 12:53:53 PM PST by SomeoneNeedsToSayIt
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To: Paleo Conservative

Expect the return of Flying Tigers Airlines before that happens.


13 posted on 01/23/2007 1:01:13 PM PST by Eric in the Ozarks (BTUs are my Beat.)
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To: Paleo Conservative; Proud_USA_Republican
But the cancellation of Fedex and UPS orders for the A380F will open up about 20 early slots for the passenger version.

Is that correct?

It's been claimed elsewhere that the schedule problems with the freighter are based on factory-construction problems in Hamburg, not "weight", as others have conjectured.

This tells me that freighter delivery slots and passenger delivery slots are not interchangable.

14 posted on 01/23/2007 1:07:48 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: Paleo Conservative

Did the article say they sold/bought slots or actual planes?


15 posted on 01/23/2007 1:13:06 PM PST by gogeo (Irony is not one of Islam's core competencies (thx Pharmboy))
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To: DuncanWaring
This tells me that freighter delivery slots and passenger delivery slots are not interchangable.

That would only be a factor if the passenger line were running to capacity; it's not. The limitation is getting the parts from the suppliers. Building assemblies for the freighter version that then have to be transported takes away resources from building parts for the passenger model. Also the freighter program was taking engineers away from fixing problems with the initial passenger variant.

16 posted on 01/23/2007 1:20:53 PM PST by Paleo Conservative
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To: Paleo Conservative; SomeoneNeedsToSayIt

This A380 debacle has been very interesting to watch from the peanut gallery.

I like the idea presented in post # 12.


17 posted on 01/23/2007 3:30:52 PM PST by Tainan (Talk is cheap. Silence is golden. All I got is brass...lotsa brass.)
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To: ArrogantBustard
" Question 0: Can the A380 program be profitable? "
Only if the EU government bails them out and hands them more money.
18 posted on 01/23/2007 4:23:51 PM PST by Prophet in the wilderness (PSALM 53 : 1 The FOOL hath said in his heart , There is no GOD .)
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To: Paleo Conservative
The portfolio includes 12 Boeing 747-400 freighters, the largest commercial cargo aircraft, with UPS expected to confirm this week that it has cancelled the sole remaining order for the Airbus A380F.

Sweet .... anyone know where we can get a good photoshop of an A380 going down in flames?

19 posted on 01/23/2007 4:25:04 PM PST by Centurion2000 (If you're not being shot at, it's not a high stress job.)
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To: Registered

Ping.


20 posted on 01/23/2007 4:27:36 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: bondjamesbond

Profit is irrelevant. The important thing are featherbedded union jobs and national pride, god know the French need all they can get.


21 posted on 01/23/2007 6:36:10 PM PST by appeal2
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To: Centurion2000
A380 going down in flames?

Much as I loathe ScareBus, that's just a bit too sick even for my sick sense of humour. YMMV.

22 posted on 01/23/2007 7:03:58 PM PST by ArrogantBustard (Western Civilisation is aborting, buggering, and contracepting itself out of existence.)
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To: Paleo Conservative

Thats like saying its better the titanic was hit from the front because that means more people with buckets can report to the rear of the ship to help bail water.


23 posted on 01/23/2007 11:02:17 PM PST by Proud_USA_Republican (We're going to take things away from you on behalf of the common good. - Hillary Clinton)
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