Jet-Leasing Godfather Udvar-Hazy Warns Boeing, Airbus Over Glut

(Bloomberg) -- Veteran aircraft-leasing executive Steven Udvar-Hazy warned Airbus SE and Boeing Co. to avoid creating a glut of unwanted planes as they race to lift production following the easing of coronavirus travel curbs.

Accelerating build rates too quickly could result in surpluses that damage aircraft values, making such a move “one of the biggest dangers” facing the aviation sector, the Air Lease Corp. founder and chairman said Monday at an Airline Economics conference in London.

“Overproduction is not something that’s good for the airline industry, because it’s going to drag down residual values, it’s going to result in surpluses that the airline industry cannot really afford,” he said.

Airbus said in May it would lift production of its best-selling A320 jets beyond pre-pandemic levels within two years. Boeing, which is starting to emerge from a deep slump triggered by the grounding of its 737 Max model after two fatal crashes, plans to double output of the single-aisle jets by early next year.

Udvar-Hazy said he doesn’t expect any “dramatic new aircraft introductions” until the 2030s with the current generation of jetliner engines having pushed the limits in terms of fuel efficiencies. He said he’s not sure whether Boeing will go ahead with a model to replace the 757 in mid-distance markets.

Air Lease expects passenger numbers this year to be about half of 2019’s 4.5 billion, increasing to about 4 billion in 2022, the executive said.

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