Tuesday, June 20, 2006

Blood in the Water III: Udvar Gets Antsy

It was reported in Bloomberg this morning that International Lease Finance Corp., a/k/a ILFC is making ominous rumblings of the "cancel my order" type in response to the disarray and ongoing delays on the A380 program over at Festung Airbus. ILFC says that it can cancel its order without penalty if there is a six month delay, and it is considering canceling some or all of their order for the A380. Steven Udvar-Hazy, ILFC's commander in chief, was reported to have said "We are not happy and are on safe ground to cancel our order."

There are certain things that one cannot do with major customers. One of them is not giving them what they want, on time, or having a credible excuse as to why you can't deliver on your promises so as to allow the customers to make allowances in their schedules. These things happen all the time in the commercial world, it's called force majeure and everyone acknowledges it can and does happen.

On the other hand, incompetence, mismanagement, or deception of the kind that's coming out of the Festung does not fall under that rubric.

If ILFC can score some 747-8 delivery slots, the ILFC A380 order may well be finis.


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