Construction slowdowns coming for some aircraft

Airbus and Boeing are both taking a serious look at their order books for some aircraft types and adjusting the build cycle on their assembly lines to reflect the new reality. The biggest planes are the most affected by the news as more and more airlines shift to twin engine options from the quad-engine super jumbos. And both companies are feeling the pinch.

The 747 line north of Seattle is slowing down starting in September 2015. The shift from 1.5 planes per month to 1.3 is a net cut of two 747-8 each year. There are only 39 unfilled orders for the type. Most of the demand for 747-8s has been from the cargo side of the industry and, while cargo is recovering a bit, that remains a soft market.

Lufthansa’s 747-8i shortly before its inaugural passenger flight

For Airbus the questionable airframe is the A380. Bloomberg ran a story this week suggesting that the A380 might halt production in 2018 if new orders cannot be secured. That was followed up a day later by a different Airbus executive promising that the type would be re-engined or stretched to an even higher passenger capacity before 2018 rather than halting production. Of course, it is not clear which customers (there are not a ton for the A380, though more than for the 747-8i passenger config) who have expressed interest in a higher capacity version of the aircraft. And while new engines would make for a more efficient plane the A350 and 777X might also meet those same efficiency targets with lower long-term maintenance costs and better flexibility for the airlines. Not surprisingly Emirates has expressed frustration about being on the hook for the A380 program’s costs; the carrier ordered 140 of the type and has taken delivery of more than 50.

A Qantas A380 lands in Los Angeles
A Qantas A380 lands in Los Angeles

Moreover, Airbus is also slowing A330 production rates by one plane per month; the new output rate will be 108 annually. This move comes amidst slowing demand for the type even with the re-engined A330neo type now available for airlines to purchase. Sure, Delta just announced an order for 25 of the A330neo but that only brings to 40 the total confirmed orders so far. And there are just over 100 pending A330ceo orders yet to be filled. It is not too surprising that the company is planning for a construction slowdown given that it may not have anyone to buy the newly built planes.

This is not to say that the companies are slowing production overall. For Boeing the 737 lines are continuing to increase pace and the 787s should similarly speed up. And the pace of those increases far outweighs the cuts to the 747 line for total planes delivered annually. And yet there’s still something a bit sad about the news; the iconic shape of the 747 is one which will be missed in the skies. As for the A380, not as iconic a shape but definitely potential bad news for Airbus if it has to kill the production line so early in the aircraft’s lifecycle.

There’s also the part where it seems the airframers and even a few airlines may have bet big – and wrong – on what the market was looking for. That’s always unfortunate to see. Doubly so when you go back and look at some of the marketing collateral they came up with trying to push these new planes out the door while missing the reality of what the industry really needed. Oopsie.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.