Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

Oil prices would have to drop far below $70 a barrel before OEMs feel any effect on demand for airliners, notwithstanding speculation that precipitous price declines could discourage airlines from committing to more efficient jets at a time when replacement demand accounts for half of all orders for new airplanes, according to Boeing analysis. Speaking during his company’s third-quarter earnings call on Wednesday, Boeing CEO Jim McNerney asserted that record order volume has resulted not only from historically low interest rates and a desire to offset high fuel prices with more efficient new airplanes, but also from the airplanes’ ability to deliver higher passenger and cargo revenue, higher residual values, more range “and a better overall passenger experience.”

 


“First of all, airlines tend to buy on the distribution around a mean, so in a volatile world that distribution is pretty wide,” said McNerney. “So their behavior tends to be driven by that more than a point estimate. Our analysis shows that the price of oil could still fall a long way before our [air]planes are anything other than compelling economically...This replacement generation has more compelling numbers associated with it than any generation I’ve seen since the 707.”

 


Brent crude oil prices have dropped from about $115 a barrel in June last year to $90 in early October. With crude oil trading at some of the lowest levels since 2012, prices have felt pressure from swelling inventories and slower-than-expected economic growth in regions such as Europe and China. Analysts expect further declines to spell particularly good news for airlines, whose expenditures on jet fuel had risen from less than 25 percent of total costs in 2008 to some 40 percent at their peak prices. &nbsp;

 


As oil prices spiked, so did demand for a new generation of airplanes promising operating-cost reductions ranging from 15 to nearly 25 percent and, with it, a doubling of the expected proportion of replacement demand from some 25 percent to 50 percent. Boeing has welcomed the trend, asserting that it helps insulate it from fluctuating GDP growth.

 


“I think that’s going to continue for another decade or so, with a more robust mix of replacement versus growth, which is the good thing about us in the sense that it will keep us disconnected from overall GDP trends,” said McNerney. “And it all stems from innovation.”

 


“We would not see much impact at $70 [a barrel],” McNerney added in reaction to a reference to some analysts’ recent oil price forecasts. “You would have to be much different from $70...based on our analysis.” &nbsp;

 


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