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Twin-aisle aircraft deliveries 20-year forecast (update 2015)

In a previous post I shared a graphic with the “Commercial wide-body airplanes’ deliveries per year, 1969-2015” (see below). I then commented:

“Looking backwards it’s clear that 2015 was a peak in wide-bodies deliveries. Looking forward it may have been a short-term peak, but looking further ahead it is not so clear.”

Commercial wide-body airplanes' deliveries per year, 1969-2015.

Commercial wide-body airplanes’ deliveries per year, 1969-2015.

Last November, I published a post, “Airbus vs. Boeing, comparison of market forecasts (2015)“, with the following table that compares Airbus’ Global Market Forecast and Boeing’s Current Market Outlook:

Comparison of Airbus GMF and Boeing CMO 2015-2034.

Comparison of Airbus GMF and Boeing CMO 2015-2034.

If we focus on the twin-aisle segment, we see that both companies are very closely forecasting between 7,500 and 7,600 passenger aircraft deliveries (with less than 90 aircraft of difference, a 1.2% deviation). The forecast for the freighters is not shown in the table but it is also very similar for the segment, between 718 (Airbus’ view) and 800 (Boeing’s) freighter aircraft. In combination, each company foresees between  8,290 (Boeing view) and 8,297 (Airbus’) airplanes’ deliveries in the segment. Remarkably similar and definitely converged from years ago.

In the very large aircraft segment both forecasts do not converge. But since the figures of deliveries are an order of magnitude lower, I will focus on what they define as “twin-aisle” segment.

Let’s put forward again the question: was 2015 a peak year in terms of twin-aisle deliveries?

Quick math: if we take those ~8,300 aircraft to be delivered in the next 20 years, we arrive at an average of 415 aircraft per year. That figure excludes the very large aircraft. In 2015, there were 367 deliveries of twin-aisles (excluding A380 and 747):

  • A330: 103
  • A350XWB: 14
  • 767: 16
  • 777: 98
  • 787: 135
  • IL-96: 1

Thus, in 2015 we would have been far from the peak. If we simply linearized those 8,300 deliveries from 2015 levels up to 2034, we would get the following profile:

Twin-aisle deliveries historic and 20-year forecast.

Twin-aisle deliveries historic and 20-year forecast.

The reader may correctly think that market forecast figures are not engraved in stone and are rather optimistic. Fair enough.

Both forecast have been rather accurate in the past forecasting traffic growth. Not necessarily in forecasting the number of aircraft in each specific segment. See the post, “Aircraft market forecasts accuracy (update 2014)“,  in which I analyzed Boeing CMO forecast of 1999 with the actual fleet at the end of 2013. See the result below:

Comparison of aircraft fleet at year-end 2013: 1999 forecast vs. actual (sources: Boeing CMO 1999 and 2014).

Comparison of aircraft fleet at year-end 2013: 1999 forecast vs. actual (sources: Boeing CMO 1999 and 2014).

Thus, in 2013 there were 27% less twin-aisle aircraft than what had been predicted in 1999.

If 2015 market forecasts were off the mark in the same proportion (27%), that would mean that instead of 8,300 airplane deliveries in the next 20 years we would see about 6,050… meaning ~300 airplanes per year in the 20-year span.

In that case, we might have seen the peak.

Let’s take a look at current backlogs at the end of 2015:

  • Airbus: 1,112 a/c
    • A330 family: 350 a/c
    • A350: 762 a/c
  • Boeing: 1,383 a/c
    • 767: 80 a/c
    • 777 family: 524 a/c
    • 787: 779 a/c

Thus, at the end of 2015 the combined backlog (firm) stood at ~2,500 airplanes. That is a 30% of the 8,300 forecast, and a 41% of the 6,050 aircraft (i.e. forecast reduced in 27%).

The sceptic reader could still have doubts of the quality of the backlog (i.e., some customers may go through troubled waters and cancel orders).

Last year, I published a post, “Boeing 787 orders, cancellations, deliveries & backlog through 2014“, in which I showed the orders and cancellations of the 787 programme since its launch. See the summary graphic below:

787 orders, cancellations, deliveries and backlog through 2014.

787 orders, cancellations, deliveries and backlog through 2014.

The 787 programme experienced serious delays and industrial issues from 2009 to 2013 in the midst of the worst financial and economic crisis since the Great Depression of the 1930s. Through 2014, the programme had suffered 247 cancellations out of 1,318 gross orders, that is almost 19% of cancellations.

I believe that 19% can be considered an upper ceiling of how much of the current 2015 twin-aisle backlog (~2,500 a/c) could be considered as dubious. Thus, at least about 2,000 firm orders could be seen as rather secured.

Let’s see at the question (was 2015 a peak year?) from a different perspective: in the immediate coming years, what are the announced production rates?

Thus, according to the announced production rates and targets, in 2016 we should see about 380 twin-aisle combined deliveries, higher than the 367 we saw in 2015.

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Commercial wide-body airplanes’ deliveries per year, 1969-2015

The first wide body commercial airplane, the first twin-aisle ever, the Boeing 747 first flew in February 9th 1969 and it was first delivered to a customer (Pan Am) in December 1969. In the following years new wide bodies arrived to the market: the Douglas DC-10 (in 1971), the Lockheed TriStar (1972), the Airbus A300 (1974)…

In the last weeks, both Airbus and Boeing have released the figures of aircraft deliveries for the complete 2015. With them I updated a graphic I had made back in 2013 with the commercial wide-body airplanes’ deliveries per year. Take a look at it.

Commercial wide-body airplanes' deliveries per year, 1969-2015.

Commercial wide-body airplanes’ deliveries per year, 1969-2015.

Some reflections:

For the first time ever, over 400 twin-aisle aircraft were delivered in a year. The feat is remarkable.

The average number of deliveries for the previous 20-year period (1995-2014) was 215 airplanes per year. Up to now, in the previous 46 years of twin-aisle market, in only 3 years more than 300 airplanes were delivered in a single year (the previous 3: 2012, 2013 and 2014) and only 12 times more than 200 airplanes had been delivered (including the previous 3 with more than 300).

The combined steep production ramp-up during last 4 years has enabled to reach a production rate of almost the double of what was produced just 5 years ago. In particular, the combined compound annual growth rate (CAGR) of the rate of deliveries for the last 5 years has been 16.1%, for the last 10 years 10.4%. These rates are the triple and double than the yearly growth of traffic (measured in RPKs).

With the figures up to the end of 2015, almost 8,000 wide-body airplanes had been delivered. Thus, by now, end of January 2016, we have certainly reached the figure (1). We however don’t know whether the 8,000th twin aisle was a Boeing or an Airbus (2).

The share of deliveries in 2015: 65% Boeing and 35% Airbus. Boeing has slightly increased its share of deliveries in the last 4-5 years, in particular with the ramp-up of the 787.

There were 135 787s delivered in 2015. That is another remarkable feat: the largest amount of twin-aisle deliveries of a single model in a single year ever.

Only 6 times ever (combination of model-year) have there been twin-aisle deliveries of over a hundred airplanes: the A330 in the last 4 years (with a peak of 108 airplanes in 2013 -then a record- and 2014) and the 787 the last two years. Only other 10 times there were deliveries of more than 80 airplanes of a single model in a year: the A330 (2010-2011), the 747 in 1970 and the 777 (7 times, including the last 4 years consecutively, out of which the last 3 on the verge of 100 deliveries – 98, 99, 98).

Two days ago Boeing released its 2015 earnings, and with it news of 777 production cut came up. Some time before similar news had come of 747 production rate decrease. With these news, quickly came comments of whether aerospace cycle may have peaked (see here). Looking backwards it’s clear that 2015 was a peak in wide-bodies deliveries. Looking forward it may have been a short-term peak, but looking further ahead it is not so clear. I will leave for another post the outlook of past deliveries mixed with what Airbus and Boeing market forecasts say (GMF and CMO, respectively).

(1) With the sources I used,  at the end of 2015 there were a combined 7,988 wide-bodies delivered. However, I found different figures for the deliveries of the Ilyushin IL-86 (between 95 and 106). In any case, both figures would leave the total tally below 8,000 (making 2016 “the year of the 8,000th delivery”); I took for the analysis most conservative figure.

(2) Working at the moment for the Airbus A330neo programme, I will assume the 8,000th delivery was an A330, rather than a Boeing.

(3) I have indicated in the post that we have just passed the mark of 8,000 wide-bodies delivered since 1969, and, on the other hand, the different studies state that there are about 4,900 twin-aisle in operation. The gap of ~3,100 airplanes corresponds to those retired, parked, scrapped, crashed, displayed in museums…

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Wide-body mix in 17 years of Boeing CMOs

Two years ago, I wrote a post showing the puzzling change in Boeing’s predicted mix of twin-aisle sales, between small and medium wide-bodies (“Wide-body mix in 15 years of Boeing CMOs”) (1). A few days ago I wrote a post about the publishing by Boeing of its Current Market Outlook for 2015-2034.  As I noted in that post, this year’s CMO is consistent with last year’s figures, i.e., the larger share of the forecasted market corresponds to small wide-bodies (787s from Boeing’s perspective). Recall the numbers:

  • small wide-bodies: 4,500 a/c in CMO2015 (passenger aircraft only),
  • medium wide-bodies: 2,990 a/c in CMO2015 (same figure as in CMO2014).

In the sub-segment of the medium wide-bodies passenger aircraft figures for  have remained constant and there is a slight increase in freighters (60 a/c); whereas for small wide-bodies the main increase is seen in the passenger aircraft (+230 a/c).

Since I keep a collection of CMOs from many years, I will include again a comparison going 17 years back…

Twin-aisle mix distribution (Boeing CMO 1998-2015, includes both passenger and freighter aircraft).

Twin-aisle mix distribution (Boeing CMO 1998-2015, includes both passenger and freighter aircraft).

Seeing at the graphic, made using Boeing’s forecasts’ figures:

  • During the first 5 years (1998-2003) the trends are quite constant, seeing medium wide-bodies a slightly higher demand.
  • From 2003 to 2007, the mix is reverted, possibly to favour the launch of the 787.
  • In 2008 the CMO did not provide the split.
  • From 2009 to 2013, you can see that both trends in the forecasts are erratic… why? Only Boeing knows. (2)
  • From 2013 to 2015, it seems that the trends are stabilized again in a higher demand for 787-size aircraft.

(1) Last year, I made an update of that post with the consolidated view of the last 16 years, find it here.

(2) A speculation: a Boeing-internal need to sell the concept of the 777X?

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Review of Boeing Current Market Outlook 2015

Just ahead of Paris air show, Boeing Commercial published its yearly update of the Current Market Outlook (CMO) for the next 20 years of commercial aircraft market (2015-2034).

I have just compared the figures for passenger aircraft of the last two years’ CMOs:

CMO 2015 vs 2014 comparison.

CMO 2015 vs 2014 comparison.

Some comments to it:

  • You can see that the total number of new aircraft delivered has slightly increased from 35,930 to 37,130, a 3.3%, which is consistent with the 4.9% traffic increase (1) that Boeing predicts (2).
  • The volume (Bn$) increases by a larger percentage, 6% (320Bn$)… this is due mainly to the increase in:
    • single-aisle aircraft expected sales in volume (8%, +210Bn$) and aircraft (+210), and
    • small wide-body segment with 230 more aircraft (+5%) and an increase in volume of 100Bn$ (+9%).
  • Two years ago, I wrote about a sudden change between CMO 2013 and CMO 2012 of the mix in wide-bodies; in this respect, CMO 2015 is consistent with last year’s one, showing simply a slight increase in demand for both sub-segments.
  • Interesting to note how Boeing continues to downplay the large aircraft segment (-16% in terms of number of aircraft) at the moment when a A380neo is discussed.

This year study’s figures and presentation focus on single-aisle (737 MAX, “fuelling forecast”) and small wide-bodies (787, “re-shaping long-haul marketplace”), the products to be pushed by the sales force.

Find below the nice infographic [PDF, 2.1MB] that the guys from Boeing have put up together:

Boeing Commercial Aviation Market Forecast 2015-2034 infographic.

Boeing Commercial Aviation Market Forecast 2015-2034 infographic.

As always, I recommend going through the CMO, as you can learn a lot about the business: from global numbers, to growth, traffic figures, fleet distributions, forecasts, etc… You may find the presentation [PDF, 3.8 MB], a file [XLS, 0.6 MB] with all the data or the full CMO report [PDF, 6.5MB].

For a comparison between this CMO and the respective Airbus’ GMF we will have to wait until after the summer, when Airbus publishes its update. Until then, find here the comparison based on 2014 market studies.

This year together with the CMO, Boeing provides two interesting papers from a couple of years ago: Key Findings on Airplane Economic Life [PDF, 0.3MB, dating from August 2013] and A Discussion of the Capacity Supply -Demand Balance within the Global Commercial Air Transport Industry [PDF, 0.6MB, dating from August 2013].

(1) Traffic increased measured in RPKS (revenue passenger kilometers) in billions.

(2) These two ratios, 3.3% fleet demand and 4.9% traffic growth, point to an implicit increase in the average size of the aircraft in fleet and / or a higher utilization of the aircraft (higher availability).

(3) Find the reviews I wrote comparing 2014 CMO with 2013 CMO and 2013 CMO with 2012 CMO.

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Musée Espace Air Passion (Angers)

In the last post I described the Fly Out to Les Châteaux de la Loire that we made the last weekend. In that post I mentioned that we visited the museum Espace Air Passion in Angers airport. This post will be dedicated to that beautiful museum.

This museum is owned and run by an association, the “Groupement pour la Préservation du Patrimoine Aéronautique” (GPPA), created back in 1981 by a group of friends around the project of restoring an old aircraft (a jewel) from René Gasnier, a local pioneer of French aviation who flew in 1908 along 1km in an airplane built by himself. That airplane is the first one you get to see in the museum:

Rene Gasnier III, built in 1908, restored in 1988.

Rene Gasnier III, built in 1908, restored in 1988.

René Gasnier built his first airplanes between 1907 and 1908. This model, the III was built in 1908. As you can see it was made of wood and cloth. It mounted an Antoinette engine with 8 cylinders in V, with a power of 48hp, wingspan of 10m, less than 500kg at take off. It took the enthusiasts of GPPA over 1000 hours to restore it.

This airplane is surely not the only unique piece of the museum. Take a look at the following two airplanes.

The Gérin “Varivol”, built in 1938 (by the Compagnie Française d’Aviation), was based in the concept of using moving wings which extended themselves increasing the wingspan at the time of take-off when more lift was needed and reducing the wingspan to decrease drag at cruise. A prototype was successfully tested in the wind tunnel of Chalais-Meudon in 1946, however the actual airplane seems to never have flown. Had it flown, it was to have a cruise speed of ~455km/h while only 92km/h for landing speed. The wings were to be extended/retracted 2.75m per side out of a total retracted wingspan of 8.10m.

Alerion Riout 102 T.

Alerion Riout 102 T.

Built in 1937 by René Riout (at the workshop of Louis Breguet) with duralium, the 102 T explored the concept of flying by batting its wings (4, two at each side of the fuselage). During its test in 1938 when the pilot increased the engine regime up to around 4500rpm, after a few seconds, the observers saw torsion vibrations in the tip of one the wings before it broke, closely followed by the other 3 wings. It was then dismounted and forgotten till 2005 when the restoration at GPPA started.

This reminded me of a quote attributed to Igor Sikorsky that goes like:

Our engineers have determined that aerodynamically, the hummingbird shouldn’t be able to fly, but the hummingbird doesn’t know it so it goes on flying anyway.

Another oddity of the museum is one of the only two prototypes (1) ever built of the Moynet Jupiter (designed by André Moynet) which had the rare configuration of two push and pull engines, one in the front and one in the back of the fuselage. It was never sold to any customer, but it flew for the first time on December 17, 1963 (60 years after that glorious day in Kitty Hawk).

Moynet Jupiter.

Moynet Jupiter.

The museum has these other two sailplanes which have been declared patrimoine de l’aviation française due to the records they collected in their high time, the Caudron 800 Épervier and the Avia 40P:

We also enjoyed the visit to the workshops where they restore the fuselages and the wings. Take a look at the pictures and notice the wood and the cloth. Forget about those pictures the next time you get onboard a general aviation airplane.

We were given a guided tour by two members of the association, their explanations, anecdotes, connection with French famous pilots (including former Airbus’ test pilots) were invaluable. On the other hand, the audience couldn’t have been more responsive. Take a look at the pictures above: scores of years of aerospace engineering experience (flight testing, training), thousands of flying hours as pilots, real aviation geeks at its best.

The museum also has playing area for children, a MH-1521 Broussard for children (an adults) to get on and play, and some other beautiful aircraft including a Caudron PC431 Rafale, a Morane Saulnier 505, a Piper L4H Grasshoper, or the car Marcel Leyat Helica… see them below:

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(1) The other prototype is at  the Musée de l’Air et de l’Espace, at Le Bourget.

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Airbus backlog at end 2014 into perspective

Last Friday, Airbus Group announced its 2014 full year financial results at a press conference in Munich (Germany). You can find here [PDF, 785KB] the presentation used at the conference. In general, the results have been very positive in most metrics. There is one that in my opinion especially deserves attention, see it bellow:

AIRBUS 2014 results - backlog.

AIRBUS 2014 results – backlog.

Airbus has a record backlog of 6,386 civil aircraft.

In 2014, Airbus delivered 629 commercial aircraft. That is why, in the presentation it is stated “> 10 years of deliveries”. In essence, one may see it as if Airbus airplanes were sold out for the next 10 years! Of course, that is not the case for all product lines (think A330, A380) and will not be the case as a production ramp-up is announced in the A320ceo line.

Nevertheless, to put it into perspective, I wanted to compare this backlog to the historical aircraft deliveries of Airbus (which can be found here). Since its first delivery, an A300B2 back in May 1974, through the end of January 2015, Airbus had delivered 8,921 aircraft. With the information of yearly deliveries I compiled the graphic below, yearly per model and cumulative deliveries for all models combined.

AIRBUS deliveries through January 2015.

AIRBUS deliveries through January 2015.

Take a look at the cumulative deliveries.

On the occasion of the 8,000th delivery, on August 2013 (an A320 for AirAsia) Airbus published an article making a review of all the main delivery landmarks.

  • the 1st delivery, in May 1974, an A300B2.
  • the 1,000th delivery, in March 1993, an A340-300,
  • the 2,000th handover, in May 1999, an A340-300,
  • the 3,000th delivery, in July 2002, an A320,
  • the 4,000th delivery, in September 2005, an A330-300,
  • the 5,000th delivery, in December 2007, an A330-200,
  • the 6,000th delivery, in January 2010, an A380,
  • the 7,000th handover, in December 2011, an A321,
  • the 8,000th delivery, in August 2013, an A320 featuring Sharklets,
  • the 9,000th delivery… somewhere in the Spring 2015.

You can see that since the first delivery in 1974, it took Airbus almost 19 years to deliver the first 1,000 aircraft.

It took over 35 years to deliver the first 6,000 aircraft. That is what today it has as backlog…

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Boeing list prices increases vs. discounts increases (update for 2014)

In a previous post I updated the estimate of what is the average discount Boeing applies when selling its commercial airplanes using 2014 data of list prices, deliveries and reported revenues. The figure I came up with was a 47% discount. I included the following graphic showing the discount evolution:

Boeing Average Discount Evolution, through 2014.

Boeing Average Discount Evolution, through 2014.

Last year, seeing the increasing trend of average discount together with knowing the fact that Boeing regularly increases list prices triggered the following question: Have Boeing airplane discounted prices increased, decreased or stayed constant in the recent years? I set out to answer this question using the estimated average discount of each year (1) from the graphic above.

The Boeing list prices (LP) (2) can be found here. I have been recording those prices for years and thus have a table with the evolution of list prices for each model year by year. The following step is to apply the average discount estimated for each year to then-year list prices, to get the estimated discounted prices (EDP) (2) per model. Thus, a table can be built for the last 6 years.

You can find below the result for the best-selling aircraft during previous years: 737-800, 737-900ER, 777-300ER and 787-8. Together these 4 models amounted to over 640 deliveries in 2014 or 89% of the total 723 airplanes Boeing delivered in 2014.

Boeing List and discount Prices evolution table, 2008-2014.

Boeing List and discount Prices evolution table, 2008-2014.

In the table above I included in black figures what have been Boeing list prices of these models in the past years (as reported in their website) while I marked in blue the figures which are estimated, using as a departure point the calculated averages discounts per year (also included in blue in the table). I included as well the list prices year-on-year change as a % of the previous year list prices, per model.

The average list price increase included at the bottom line is computed with the information of all Boeing models (19 in 2008 and 20 in 2014, though different ones (e.g. last year addition of 777-8X and 777-9X), a total of 26 different models along this period), not only the 4 included in this table.

You may see in the table above that after not increasing prices in 2009, Boeing has steadily increased them in 2010 (6.3%), 2011 (4.7%), 2012 (6.7%), 2013 (1.9%) and 2014 (3.1%). However, if you take a look at the blue figures in the same table you will notice that prices of 2014 are between 2010 and 2011 price levels for all 4 models! That is, the widely announced yearly list prices increase has been yearly offset by a discreet (not-announced) increase in the discounts applied to the sales of airplanes. Thus, the pricing power of Boeing has remained barely constant during the last 5 years. You may see it better in the graphic below:

Boeing List & discount Prices evolution graphic vs. inflation in USA (through 2014).

Boeing List & discount Prices evolution graphic vs. inflation in USA (through 2014).

The graphic shows the price evolution for each of the 4 airplane models selected, taking as a reference their list and estimated discounted prices in 2008 (indicated as 100%) and also the evolution of inflation in the USA (3) in purple, to reflect the evolution of real prices (i.e. accounting for inflation). List prices are shown with straight lines, versus dashed lines used for estimated prices. Each pair of prices for each aircraft is presented in the same color for easier identification. Some comments to the graphic:

  • Through continuous increases, 2014 list prices were between 21% (737 and 777) and 31% (for the 787) higher than in 2008.
  • However, due to increasing discounts from 38% in 2008 to 47% in 2014, the increase in list prices is almost entirely offset (especially for 737 and 777, just 4% above 2008 levels).
  • 2014 discounted prices are below 2011 discounted prices for all models except 787.
  • If compare the evolution of prices vs. the US inflation (general prices in 2014 being 10% higher than in 2008), we see that:
    • Boeing actually lost pricing power in both the 737 and 777, which are cheaper in real (inflation-adjusted) discounted terms in 2014 than they were in 2008 (about 6% cheaper).
    • Only the 787 has been able to keep up the pace of discount escalation and inflation.

(1) There is no way to know the real price and discount that Boeing applies in each sale, as it will depend from customer to customer (American Airlines -AMR- or Fedex) and from model to model (737-800 or 787-8). There where competition is tougher, discounts will be higher. However, the estimates I have made are an average of all Boeing aircraft sold in a given year.

(2) Both list prices (LP) and estimated discounted prices (EDP) are expressed in then-year dollars.

(3) US inflation series since 2008: -0.4% (2009), 1.6% (2010), 3.2% (2011), 2.1% (2012), 1.5% (2013) and 1.6% (2014).

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