The market for even newer narrowbodies remains dire with MAX orders being cancelled in their hundreds, dozens of customers seeking to defer deliveries, and lessors being deseiged by requests for lease rental deferals. To a large extent the worst is yet to come for lessors. While lessors have thus far been dealing with a large number of requests for deferrals, essentially the lessees have far more focussed on seeking to change and contract operations to reflect the new market imperatives in terms of lesser traffic and Covid regulations. Operators have benefitted from direct and indirect government support as well as lessor assistance in anticipation of a return to some degree of normality in the near term through a vaccine, herd immunity and relaxation of rules and quarantines. But the phoney war is now nearly over and the lessees have to come to terms with the market realities. There is no early return to normality; government assistance is ending; passenger numbers are not returning in sufficient numbers; passenger aversion to air travel is ever higher; there is no valid vaccine; lease rentals that were deferred now need to be paid back; quarantines are changing on a daily basis; business travel remains low; and the industry is heading into the weaker Fall season. Many airlines have sought to reintroduce flights in numbers only to be forced to backtrack - Ryanair for example. Lessees are now faced with signirlcanly increasing expenses as a time when revenues are sporadic and inconsistent. This will now translate into a new round of demands for lease deferalls and non payment. The dire conditions that the lessors have sought to allay by a raft of temporary and operator specific measures can no longer be avoided such that man lessors will now be asking for a great deal more financial support from their investors.
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