The higher the crude price, the more urgent the need to replace old metall. We have something like 1.000 737 from the 2nd generation needing replacement as well as the first Airbus A320s now reaching their targeted lifetime cycle number of 48.000 and getting retired. There will be plenty of demand, and it will be spurred by higher crude prices.
On top of that, the demand in Asia is still very strong, especially China once again outpacing any forecast. It can not surprise anyone that even very early 737-800s are easy to place in China at rather good lease rates.
With deregulation to increase in Asia, demand will increase dramaticly there.
We had the discussion with Top Level Airbus marketing folks last week, and they are not worried at all about their Narrowbody orderbooks. There is just too much old metal still around flying that needs replacement.
Regarding the Situation Norwegian is in.
They have started raising prices and they will do continue as crude prices climb - just in line as their main competitors.
SAS increases, Easy increases, Air Berlin adds fuel surcharges and booking fees. At the end of the day, people may fly less, but they still will fly. That could result that we - at least for a certain period - may see smaller fleets, but it will not lead to people stop flying.
And with people feeling the earnings crunch, the low-fare airlines may have a slight advantage. Not because they really are cheaper all the time, but because they do have that image and that will lead people to book with them, even if they are slightly more expensive than the competition.