Airlines usually contact aircraft manufacturers and agree on the terms of payments when they require new machinery. They obtain the options from the aircraft manufacturer. When buying an aircraft, these options allow the airline to purchase additional airplanes later on at an agreed fee. These options give airlines a choice to delay obtaining the other aircraft until the time when the merchandise conditions become clear. It is until a time when the purchase of the plane can be accounted for. Reasonably, there is a guaranteed delivery slot for the airlines, and preservation in the manufacturing queue is placed. After completing these options, the airline can then set its order without taking a position at the end of the queue. Putting it at the end of the queue will mean the delivery of the aircraft will be delayed for many years. At times, the airline may not be compelled to buy the aircraft since the future conditions do not allow the company’s fleet to be expanded. The economic conditions determine how manufacturers sell the aircraft buying options, with the possibilities of below the realistic value or the real value.
The rising oil prices could trigger the purchase of new narrow-body aircraft, which implies the Original Equipment Manufacturers will reap even more than they benefited before. These aircraft replacements mean the companies will have fuel-saving costs, which reduces the operating costs of the airlines. The rising fuel prices have a positive impact because it shortens the payback periods of new aircraft. The airlines that want to save on fuel expenses will definitely purchase the new models that hold the most fuel. Airlines will look to have win-win situations and most likely will not complain but find solutions, including replacement of the airline, with all factors to be considered.
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