As is tradition the Farnborough International Air Show saw both Boeing and Airbus deliver their annual commercial aircraft market forecast for the next 20 years. They numbers are astounding. With continued strong economic growth expected around the globe both airframers are predicting robust demand for new aircraft. Both vendors agreed that Asia will drive the bulk of economic growth and aircraft demand and even that domestic traffic in China will lead within Asia. And yet somehow the two managed to differ in their total number of aircraft predictions by some 20%. Airbus sees demand for 33,000 new airplanes over the next two decades while Boeing predicts demand for more than 39,000.
Speaking to that point Randy Tinseth, Boeing’s VP Marketing for Commercial Aircraft noted that Boeing’s numbers include ~2500 regional jets but there’s still a significant gap in the numbers. Tinseth splits that into two categories.
For wide-body aircraft Tinseth notes that Airbus still expects to deliver ~1000 A380s in the next 20 years. That’s 50 per annum for an aircraft with only 126 pending deliveries (some of which will almost certainly be cancelled. Tinseth believes that shifting those pending orders to smaller aircraft will necessitate building more of the smaller planes, “If you’re going to put all those people on those really big airplanes the traffic has to come from somewhere else.” Airbus’ John Leahy has suggested that demand for a re-engined A380 is waning in light of reduced fuel prices but it is unclear if, in reality, the demand is simply for fewer A380s in general.
But wide-bodies aren’t where the main disagreement comes for the forecasts, according to Boeing. Says Tinseth, “[Airbus] has a forecast that doesn’t even come close to supporting the rates that we see in the market today.” Airbus is looking at higher seat counts on its A321neos versus the 737 MAX 9 and the A319neo versus the 737 MAX 7. But in the middle of the single-aisle market – the A320neo or the 737 MAX 8/MAX 200 – Boeing believes it holds a strong position in terms of CASM based on seat count. And it just so happens that ~75% of the single-aisle planes purchased are in that segment.
And so, despite the growth of Airbus’ order book and the move by some traditionally Boeing customers to order the A321neo (Norwegian firmed an order for 30, converted from its open order for 100 320neo to 321neo just today) Tinseth appears unfazed. Maybe the market for those aircraft is small enough that Boeing can afford to simply sit it out. But for the time being don’t expect anything to change. Tinseth says the 777X deliveries have to begin before Boeing will start on a new MOM line.
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