New-Technology Aircraft Create Revenue Opportunities and Reduce Operating Costs
September 26 2016 - 6:00AM
Business Wire
CIT Executive Spotlight Provides Insights on
How Airlines Value New-Technology Aircraft
- Increased Revenue Opportunities,
Enhanced Payload-Range and Airfield Performance and Lower Noise
Footprint Will Enable Early Adopters To Gain A First-Mover
Advantage
- Trade-Off Between Increased Ownership
Cost of New-Technology Aircraft and Fuel Savings Depends on
Utilization
- Aircraft With New Technology Will
Require Fewer Man-Hours to Be Maintained and Will Spend Fewer Days
on the Ground
- New-Technology Aircraft Will Appeal to
High-Utilization Operators, Airlines Developing New Network
Structures, and Carriers Operating Out of Noise or Runway
Restricted Airports
Given the recent decline in oil prices, the value of
new-technology aircraft has been questioned, but this is not
warranted. New-technology aircraft create revenue opportunities and
reduce operating costs, enabling airlines to build competitive
moats that support sustainable business models. These are some of
the observations shared in “The Value of New-Technology
Single-Aisles” (cit.com/newtechnology), the latest piece of market
intelligence from CIT Group Inc. (NYSE:CIT), a leading provider of
commercial lending and leasing services.
“The advantages of adopting new-technology aircraft early will
dissipate as the world’s fleet shifts to the new types,” said Steve
Mason, Director and Head of Aircraft Evaluation and Asset Strategy,
CIT Aerospace. “It will be the early-adopters who fully utilize the
benefits of new-technology aircraft that build a lasting
competitive advantage. While the price paid for the new-technology
aircraft will be crucial to continued competitiveness, the timing
of the adoption may be more so.”
Some of the other topics discussed in the report include:
- Fuel Costs Can Be Managed:
Pricing is an airline’s strongest tool. By dynamically pricing seat
inventory to reflect changes in costs, airlines mitigate their
exposure to fuel price volatility.
- Competitive Advantage Must Be
Built: Long delivery lead-times will create technology
advantages for early adopters to exploit.
- High-Utilization Airlines Favor New
Technology: Not all airlines are positioned to take advantage
of the benefits new-technology aircraft deliver. Airlines that
operate out of airports without noise restrictions will not assign
an economic value to smaller noise footprints. Low utilization
airlines may not save enough fuel to pay for increased ownership
costs.
- The Value of New-Technology Aircraft
Differs by Airline: Manufacturers desire payback after their
costly period of product development, but new-technology aircraft
bring a different value proposition to each airline. During this
decade’s technology transition, a variety of options will permit
airlines to acquire the right tool to meet their needs.
Individuals can download a free copy of “The Value of
New-Technology Single-Aisles” (cit.com/newtechnology).
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About CIT Aerospace
As one of the world's leading aircraft leasing organizations,
CIT Aerospace provides leasing and financing packages, including
operating leases and structuring and advisory services, for
commercial airlines worldwide. CIT Aerospace owns, finances and
manages a fleet of more than 350 commercial aircraft serving
approximately 100 customers in 50 countries. cit.com/aerospace
About CIT
Founded in 1908, CIT (NYSE: CIT) is a financial holding company
with more than $65 billion in assets. Its principal bank
subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has
more than $30 billion of deposits and more than $40 billion of
assets. It provides financing, leasing and advisory services
principally to middle market companies across a wide variety of
industries primarily in North America, and equipment financing and
leasing solutions to the transportation sector. It also offers
products and services to consumers through its Internet bank
franchise and a network of retail branches in Southern California,
operating as OneWest Bank, a division of CIT Bank, N.A. cit.com
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version on businesswire.com: http://www.businesswire.com/news/home/20160926005465/en/
CIT MEDIA RELATIONS:Matt Klein, 973-597-2020Director,
Media RelationsMatt.Klein@cit.comorCIT INVESTOR
RELATIONS:Barbara Callahan, 973-740-5058Senior Vice
PresidentBarbara.Callahan@cit.com
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