News Backgrounder
Airbus and Boeing trim production rates as airlines put off purchase commitments
The global pandemic played havoc with the order books and delivery schedules of aircraft manufacturers in 2020. Will 2021 be much better? Associate editor and chief correspondent, Tom Ballantyne, reports.
February 1st 2021
It is promising to be another tough year for plane makers as airlines continue to park huge numbers of their fleets because several nations are maintaining or increasing severe restrictions on travel, including costly and lengthy quarantine rules that deter a return to flying. Read More »
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At the end of last year, aviation data consultancy, IBA, said there was a marked difference in the aircraft orders, cancellation and delivery positions of the world’s two largest aircraft manufacturers. Airbus topped the table of net orders, followed by Sukhoi and China’s COMAC. For the first time, Boeing finished last. It had a large negative net order total as a result of cancellations, mainly for the 737 MAX, which dwarfed its 2020 orders.
Airbus will deliver above 550 aircraft this year, of which three quarters will be from the A320neo family. Boeing is forecast to deliver 455 aircraft. The MAX will account for 75% of the commitments, up significantly from its provisional 2020 total of 83 aircraft predicted because of the ungrounding of the type in several market markets, IBA forecast.
Storage levels for most aircraft types are around 30%, which is twice pre-COVID-19 levels, but considerably less than the 60% of aircraft parked during the first peak of the pandemic. Fuel efficient, next generation narrow-bodies are returning to service fastest with only 20% of the fleet in storage. Demand for wide-bodies is predicted to be the slowest to recover.
IBA has adjusted its aircraft market values since its last update in July 2020. In the narrow-body segment, the values of the A321neo, A220-300 and 737 MAX 9 are holding steady, whereas the A320ceo has been adjusted downwards by 13%. In the wide-body aircraft sector, A350-1000 and A330-900 market values remain in line with the second half of 2020. But the 777-300ER has been adjusted downwards by 9% and the A380-800 by an average of 36%.
It said there will be half the number of new leases in 2020 compared with the previous year. Rates for a four-year-old B787-8 have been reduced by 14%, an A350-900 of a similar age by 10% and a 12-year-old A330-300 by 15%.
The damage done to major manufacturers last year is evidenced in their annual announcements on orders and deliveries. Last month, Boeing said it had recorded 157 deliveries and 184 gross orders in 2020, but an avalanche of cancelations resulted in -1,026 net orders. The 2020 year compared with 380 deliveries, 246 gross orders, and -87 net orders in 2019. There were five B787-8 deliveries in 2020. Additional to its MAX global grounding, quality issues and inspections on various composite fuselage and tailplane segments forced Boeing to suspend all Dreamliner deliveries after October.
“While limiting our 787 deliveries for the quarter, these comprehensive inspections represent our focus on safety, quality and transparency, and we’re confident we’re taking the right steps for our customers and for the long term health of the 787 program”, said chief financial officer, Greg Smith, in a media statement.
| 'There have been 33 airline failures with another 11 carriers seeking protection. The failure rate in 2020 would have been far greater were it not for unprecedented government support packages that far exceeded $150 billion. With aid uneven, airlines that should have failed have been able to struggle on. Initial bail-out packages are long gone and lessors, governments and financiers will be faced with more difficult decisions in their dealings with airlines. Most government support is expected to be removed in 2021, but not without an additional boost. Albeit, alternative solutions to more debt are necessary' |
| IBA consultancy 2021 |
Only four 777-300ERs came off Boeing’s Everett production line last year, but the B777F was more popular including a commitment for six from DHL. The cargo, package and courier airline also ordered eight additional freighters out of the thirteen added to the book. At the turn of the year, Boeing had a gross backlog of 4,997 aircraft.
Airbus said its 2020 deliveries demonstrated resilience in the face of the pandemic, with 566 commercial aircraft, 34% fewer than in 2019. It took 383 new aircraft orders, 268 net orders and has a backlog of 7,184 aircraft.
“Working hand-in-hand with our customers allowed us to navigate a difficult year,” said Airbus CEO, Guillaume Faury. “The Airbus teams, customers and suppliers truly pulled together in the face of adversity to deliver this result. We also thank our partners and governments for their strong support of the sector. Based on our 2020 deliveries, we are cautiously optimistic as we look into 2021, although challenges and uncertainties remain high in the short term.”
Last month, Airbus announced it had slowed a planned ramp up in aircraft production after a global surge in coronavirus cases dealt a fresh blow to demand. Output of the A320 series narrow-body, Airbus’s best-selling model, will increase gradually to 45 per month through the fourth quarter. Airbus had previously targeted a faster jump, to 47 monthly by July.
The decision marked a retreat from the optimism of last October, when Airbus told suppliers to prepare for a sharp increase in narrow-body rates in the second half of 2021. Since then, fast-spreading variants of the corona virus have sent case counts soaring, despite the start of vaccine rollouts. The developments are raising concerns an anticipated air travel rebound in the northern hemisphere Summer might be delayed.
Airbus aims to produce 43 A320 series jets per month, an increase from 40 currently, before the rate changes again. The manufacturer will hold off on a potential increase in production of the A350 wide-body this year. As planned, output of the A220, Airbus’s smallest model, will rise by one to five per month from March 31.
