Tag Archives: aircraft

Wide-body mix in 16 years of Boeing CMOs

Last year 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”). A few days ago I wrote a post about the publishing by Boeing of its Current Market Outlook for 2014-2033. This year’s CMO is more consistent with last years figures, i.e., the larger share of the forecasted market corresponds to small wide-bodies (787s from Boeing perspective). Recall the numbers:

  • small wide-bodies: 4,270 a/c in CMO2014 (passenger aircraft only),
  • medium wide-bodies: 2,990 a/c in CMO2014.

However, the trend is changed again in this year’s CMO in comparison with last year’s one: small wide-bodies market decreases while the medium wide-bodies’ one increases again. Since I keep a collection of CMOs from years back, I will include again a comparison going 16 years back…

Twin-aisle mix distribution (Boeing CMO 1998-2014).

Twin-aisle mix distribution (Boeing CMO 1998-2014).

Seeing at the graphic (made using Boeing figures):

  • During the first 5 years (1998-2003) the trends are quite constant.,
  • 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 2014, you can see that both trends in the forecasts are erratic… why? Only Boeing knows.

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Review of Boeing Current Market Outlook 2014

Just ahead of Farnborough air show, Boeing Commercial has published its yearly update of the Current Market Outlook (CMO) for the next 20 years of commercial aircraft market (2014-2033).

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

CMO 2014 vs 2013 comparison.

CMO 2014 vs 2013 comparison.

Some comments to it:

  • You can see that the total number of new aircraft delivered has slightly increased from 34,430 to 35,930, a 4%, which is consistent with the constant 5% traffic increase that Boeing predicts (1).
  • The volume (Bn$) increases by a larger percentage, 8% (360Bn$)… this is due mainly to the increase in:
    • single-aisle aircraft expected sales in volume (12%, +270Bn$) and aircraft (+1,010), and
    • medium wide-body segment with 180 more aircraft (+6%) and an increase in volume of 70Bn$ (+7%).
  • Last year I wrote about a sudden change between CMO 2013 and CMO 2012 of the mix in wide-bodies; CMO 2014 is more consistent with last year’s one even if the trend is reverted again.

This year study’s figures seem to push for the 737 and 777, which is backed by the presentation as well. It is curious how 777 market is increased whereas 787 is slightly decreased.

Find below the nice infographic [PDF, 0.1MB] that the guys from Boeing have put up together:

Boeing Commercial Aviation Market Forecast 2013-2032 infographic.

Boeing Commercial Aviation Market Forecast 2013-2032 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, 10.6 MB] and the file [XLS, 0.7 MB] with all the data.

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 2013 market studies.

(1) These two ratios, 4% fleet growth and 5% traffic growth, point to an implicit increase in the average size of the aircraft in fleet.

(2) Find the review I wrote comparing 2013 CMO with 2012 CMO.

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Musée de l’Air et de l’Espace (Le Bourget)

The Musée de l’Air et de l’Espace, in Le Bourget (north of Paris), is yet another great aerospace museum. It reminded me very much to the Aviodrome (The Netherlands) in the chronological point of view of the visit and the local aspect to it (1), paying special attention to French aviation pioneers, flying aces, French fighter aircraft, etc. This is possible, as the role France has played in the development of aviation is, no doubt, crucial.

You may see the distribution of the museum and its galleries in the plan below:

Plan of the museum.

Plan of the museum.

I will now list some of the things that in my opinion make this museum unique (I will leave some anecdotes or details to future blog posts), accompanied by the respective pictures.

Model of Alberto Santos Dumont's Demoiselle (1908).

Model of Alberto Santos Dumont’s Demoiselle (1908).

Alberto Santos-Dumont was a Franco-Brazilian aviation pioneer (2) who with his 14-bis, “Oiseau de proie“, on the 23rd of October 1906, in Paris, performed the first officially witnessed unaided takeoff and flight by a heavier-than-air aircraft. In the picture above you can see him aboard another of his early models, a Demoiselle from 1908.

Workshop of the brothers Voisin (L’Atelier des Freres Voisin),

Workshop of the brothers Voisin (L’Atelier des Freres Voisin).

Some of the construction pioneers at the time were the Voisin brothers. The museum has model of how an aircraft construction workshop could look like at the time, “L’Atelier des FrèresVoisin” (this reminded me of the William E. Boeing Red Barn at the Museum of Flight in Seattle, see a post about it here).

 

Nacelle of a dirigible  Zeppelin LZ 113.

Nacelle of a dirigible Zeppelin LZ 113.

Not everything in aviation are heavier-than-air machines, above you can see the inside of a nacelle of a Zeppelin LZ 113 used in war operations.

Old Le Bourget airport hall ("8 columns hall").

Old Le Bourget airport hall (“8 columns hall”).

Le Bourget was the first civil airport in Paris, opened in 1919. It was in Le Bourget where Charles Lindbergh landed his Spirit of Saint Louis in on the 27th May 1927 when he first crossed the Atlantic Ocean. The museum today occupies part of the old airport. In the picture above you may see the main hall, designed by the architect Georges Labro in a tender made in 1935 the ministry of aviation. The building was inaugurated in 1937 (this hall reminded me of Berlin Tempelhof, you may see a post I wrote about it here).

Models gallery.

Models gallery.

The museum includes an aircraft models gallery. As a collector of models, I liked to spend some time wandering through these models. It also helps to test your own capabilities as a spotter without having to walk or wait a lot.

Inside a C-47 Skytrain Dakota

Inside a C-47 Skytrain Dakota.

In this museum you can get on board a C-47 Skytrain (Dakota being the British designation for the airplane). I believe this was the first time I was inside a DC-3 (an aircraft of which importance to aviation cannot be overstated (3)), as if I remember well, in the Aviodrome you could get inside a DC-2 not -3.

Cut out of a Dassault Mirage F1.

Cut out of a Dassault Mirage F1.

In other museums I had seen cut outs of engines, here in Le Bourget you may see a full size cut out of a Dassault Mirage F1, a wonderful entertainment for engineers and aviation enthusiasts.

747 and Ariane 5

747 and Ariane 5.

In Le Bourget you can see replicas of the Ariane 4 and Ariane 5 (4). That allows you to get a picture of both in the same frame or to get them with a Boeing 747, as pictured above.

Inside of a Boeing 747 cut out.

Inside of a Boeing 747 cut out.

The Boeing 747 is legendary aircraft in itself (5) and the chances of flying in it are decreasing by the year as more airplanes are being retired from service. In Le Bourget, you get the chance to see it really from the inside, as parts of it are really cut out so you can admire its structure, systems, etc.

Concorde: prototype 001 and series airliner.

Concorde: prototype 001 and series airliner.

Some museums around the world have the Concorde as a highlight. In some of them you may get into it. Here in Le Bourget you may get into 2, one of them being the prototype 001, where you can see some flight test installations used for different experiments made with it.

I definitely recommend to visit this museum if you happen to be in Paris. It is located at Le Bourget airport and the entrance is free of charge. A ticket to get into some of the aircraft (747, Concorde, C-47) is sold for 8 euros. I would suggest to take no less than 4 hours to visit the museum.

(1) In the Aviodrome the local focus is put into the figure of Anthony Fokker.

(2) See in this post a review of French aviation pioneers.

(3) See more of the DC-3 in this post that a wrote as a tribute to Douglas Aircraft Company.

(4) So far, I had only seen a replica of the Ariane 5 at the Cité de l’Espace in Toulouse, see here a post I wrote about it.

(5) See here a book review I wrote about “747” by Joe Sutter, the programme chief engineer.

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Boeing real prices (accounting for inflation) after discount

In a previous post I compared for some Boeing airplanes (737-800, 737-900ER, 777-300ER and 787-8) what had been the evolution from 2008 to 2013 of the published list prices against the estimated discounted prices. In that post, I arrived to the following conclusions:

[…] the pricing power of Boeing had remained barely constant during the last 5 years.

  • Through continuous increases, 2013 list prices were between 18% (737 and 777) and 27% (for the 787) higher than in 2008.
  • However, due to increasing discounts from 38% in 2008 to 47% in 2013, the increase in list prices is almost entirely offset.
  • 2013 discounted prices are below 2010 discounted prices for all models.
  • 2013 discounted prices are almost back at 2008 levels for the 737 and 777, only the 787 seems to have stayed at 2010 levels.

I, then, received one interesting comment from a reader, ikkeman, pointing at the fact that if the estimated discounted prices are expressed in then-year dollars (1), if real prices had not increased since 2010, that meant that they had indeed decreased.

See below the graphic I included in the a previous post updated adding the data of US inflation after 2008. [The series is: -0.4% (2009), 1.6% (2010), 3.2% (2011), 2.1% (2012) and 1.5% (2013)]

Boeing List & discount Prices evolution graphic vs. inflation in USA,

Boeing List & discount Prices evolution graphic vs. inflation in USA.

With the information of the inflation (purple line) the following 2 conclusions apply:

  • 787 real price (accounting for inflation) after discount has simply kept up with inflation rate since 2008.
  • 737 and 777 real prices after discounts, however, have lost ground with respect to inflation since 2008. On average they have lost about 8.5% in total or about 1.6% per year.

(1) That is the case as estimated discounted prices have been estimated year by year from the financial reports and list prices of the year, thus, using then-year US dollars.

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Boeing discounts detailed calculation, 2013 vs. 2012

Last years I have published in the blog  some posts (1) dedicated to show what was my estimate of the average discount Boeing applies to its commercial airplanes. I included in those posts the rationale used for the calculation. Find here the post related to the calculation of the discount based on 2013 data of Boeing Commercial Airplanes revenues, deliveries and list prices.

In this post, I wanted to show in detail a simplified table (2) with the calculation comparing 2013 simplified result versus 2012:

Boeing discount detailed simplified calculation: 2013 vs. 2012.

Boeing discount detailed simplified calculation: 2013 vs. 2012.

In the table above, you may find for both 2013 and 2012 Boeing reported deliveries per model and Boeing published list prices per model (3) and Boeing Commercial Airplanes reported revenues.

What is then estimated? Boeing Commercial Airplanes services revenues (deduced from financial reports reported information), Boeing Commercial Airplanes platforms revenues (derived from the previous figure) and the average discount; this is calculated from the difference between estimated BCA platforms revenues and what should have been that figure had the airplanes been sold at list prices.

Results: average discounts of above 46% in 2013 and above 45% in 2012.

(1) Find here what is becoming a “body of knowledge” on Boeing discounts: estimates calculated for 2013201220112010 and 2009; a review of the French portal Challenges.fr of aircraft discounts prior to Le Bourget airshow of 2013; aBombardier’s CEO statement on what is known in the market as the Boeing discount; Boeing Commercial Airplanes president Ray Conner speaking about the more aggressive pricing they are being forced to offer.

(2) I refer to this table as “simplified” as it excludes from the calculation the potential influence on yearly revenues (note, not cash flow) of down payments linked to orders received in then-year versus orders received in previous years for aircraft delivered in then-year.

(3) Two assumptions are needed: 737-800A transfer prices from BCA to Boeing Defense Space & Security for the P-8 (for simplicity assumed to be the same as the 737-800 price) and for the 737-based business jets (for simplicity assumed to be the same as the 737-900ER).

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Boeing list prices increases vs. discounts increases…

In a previous post I updated the estimate of what is the average discount Boeing applies when selling its commercial airplanes using 2013 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, 2013.

Boeing Average Discount Evolution, 2013.

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 real 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) 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) per model. Thus, a table can be built for the last 5 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 560 deliveries in 2013 or over 86% of the total 648 airplanes Boeing delivered in 2013.

Boeing List and discount Prices evolution table, 2008-2013.

Boeing List and discount Prices evolution table, 2008-2013.

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 18 in 2013, though different ones, a total of 24 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%) and 2013 (1.9%). However, if you take a look at the blue figures in the same table you will notice that prices of 2013 are between 2008 and 2010 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 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 and discount Prices evolution graphic, 2008-2013.

Boeing List and discount Prices evolution graphic, 2008-2013.

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%) . 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, 2013 list prices were between 18% (737 and 777) and 27% (for the 787) higher than in 2008.
  • However, due to increasing discounts from 38% in 2008 to 47% in 2013, the increase in list prices is almost entirely offset.
  • 2013 discounted prices are below 2010 discounted prices for all models.
  • 2013 discounted prices are almost back at 2008 levels for the 737 and 777, only the 787 seems to have stayed at 2010 levels.

(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.

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Boeing commercial aircraft discounts (update for 2013)

Few days ago, Boeing released 2013 results [PDF, 841KB]. The company reported revenues of over 86.6bn$648 commercial deliveries and 1,355 net orders for its commercial aircraft. All these were widely reported by the media and mean a great year 2013 for Boeing (with increases in these metrics from 6 to 8%).

Last years, I wrote in some posts (1) what was my estimate of Boeing discounts: the relation between what is announced by the press, what appears in its list prices and sometimes as backlogs and what it is indeed computed into the profit and loss account. In this post I wanted to update, if necessary, the figure I calculated for the average discount of Boeing.

Most of the necessary information can be found in its website. Boeing list prices can be found here.

The number of gross and net orders (after cancellations) year by year can be found here.

Last year deliveries can be found in the report of financial results (or here). From there we can also deduce the figure of Boeing Commercial’s sales of services. That is not directly reported but can be deduced (all Boeing services-related sales are reported as well as Boeing Capital Corporation division and Boeing Defense’s “Global Services & Support” unit)

As in the previous years’ post:

  • I needed to make one assumption: new orders come with a 3% down payment in the year of the booking, while the remaining cost I assumed that was paid on the year of delivery (for simplicity I didn’t consider more intermediate revenue recognition milestones linked to payments, the 3% figure was taken from the AIAA paper “A Hierarchical Aircraft Life Cycle Cost Analysis Model” by William J. Marx et al.). (2)

Having put all the figures together, the calculation is immediate. Boeing Commercial Aircraft revenues in 2013 (52.98bn$) are the sum of:

  • the discounted prices times the delivered aircraft in the year (including possible penalties from delays),
  • less the down payment of the current year delivered aircraft, as the down payment was included in previous years results,
  • plus the down payment of current year net orders (this year’s calculation has been again a bit tricky as it included 737NG deliveries and 737 MAX orders),
  • plus services revenues (less than 0.3bn$ from the commercial aircraft unit – calculated, not reported).

The discount figure that minimized errors last year was 45%. Using this figure, the error obtained this year in relation to Boeing Commercial Aircraft reported revenues is 3.9%, much too high. The best estimate for last years average discounts were: 45% for 2012, 41% for 2011, 39% for 2010 and 38% for 2009.

The updated figure (which minimize errors for 2013 down to 0.2%) for the discount for Boeing commercial aircraft is 47% (3).

Boeing Average Discount Evolution, 2013.

Boeing Average Discount Evolution, 2013.

The explanation I can find for that increase shall be linked the built-in penalties for 787 plus the introduction of the new 787-10 with increased discounts for the launch customers.

(1) Find here what is becoming a “body of knowledge” on Boeing discounts: estimates calculated for 2012, 2011, 2010 and 2009; a review of the French portal Challenges.fr of aircraft discounts prior to Le Bourget airshow of 2013; a Bombardier’s CEO statement on what is known in the market as the Boeing discount; Boeing Commercial Airplanes president Ray Conner speaking about the more aggressive pricing they are being forced to offer.

(2) Two years ago, I received a comment from the analyst Scott Hamilton on the level of downpayments. He mentioned they could reach up to 30%. I tried this time to compute the calculation using that input, though the figures of discounts to be applied each year to minimize errors would have to be even higher, over 50% (!), thus I stayed with the 3% used in the above-mentioned published paper to stay on the conservative side.

(3) I find this trend of continuous increases in Boeing discounts in line with both Challenges.fr report and Ray Conner’s mentions of aggressive pricing last year, both referred to in note (1).

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Airbus vs. Boeing, comparison of market forecasts (2013)

Last Tuesday, John Leahy, Airbus COO Customers, unveiled at a press conference in London the new figures of the 2013-32 Airbus’ Global Market Forecast (GMF, PDF 5.1MB).

The last two years, I already published comparisons of both Airbus’ and Boeing’s forecasts (Current Market Outlook, CMO, PDF 3.0MB). You can find below the update of such comparison with the latest released figures from both companies.

Comparison of Airbus GMF and Boeing CMO 2013-2032.

Comparison of Airbus GMF and Boeing CMO 2013-2032.

Some comments about the comparison:

  • Boeing sees demand for 14% more passenger aircraft (excluding regional a/c, same proportion as last year) with a 9% more value (excluding freighters).
  • Boeing continues to play down A380 niche potential (54% less a/c than Airbus’ GMF), though for third year in a row it has slightly increased its Very Large market forecast, again by 20 a/c, or 3.4%.
  • On the other hand, Boeing forecasts about 350 twin-aisle and 4,400 single-aisle more than Airbus, clearly pointing to its point-to-point strategy versus the connecting mega-cities rationale presented by Airbus.
  • In terms of RPKs (“revenue passenger kilometer”), that is, the number of paying passenger by the distance they are transported, they see a similar future: Airbus forecasts for 2032 ~14 RPKs (in trillion) (a ~9% increase vs last year GMF) while Boeing forecasts 14.7 (also increased about 7%).

The main changes from last year’s forecasts are:

  • Both manufacturers have increased their passenger aircraft forecast, ~1,000 a/c Airbus and 1,400 a/c Boeing, bigger increase than last year’s change (500 a/c both).
    • In the case of Airbus it has again mainly increased the single aisle segment (700 a/c), probably reflecting the success of the A320neo launch.
    • In the case of Boeing, they decreased the twin aisle segment (80 a/c), but increased the single aisle in over 1,400 a/c.
    • As I noted in a previous post, Boeing dramatically changed the twin-aisle mix, between small and intermediate. Now it has a mix closer to that of Airbus (60-70% of small twin-aisle).
  • Both manufacturers have increased the value of RPKs in 2032  (9% and 7%).
  • Both manufacturers have increased the volume (trn$) of the market in this 20 years, again 12% Airbus (to 4.1trn$) and 3% Boeing (to 4.5trn$) (excluding regionals and freighters).

Some catchy lines for those who have never seen these type of forecasts:

  • Passenger world traffic (RPK) will continue to grow about 4.7% per year (5.0% according to Boeing). This is, doubling every ~15 years.
  • Today there are about 16,100 passenger aircraft around the world (according to Airbus), this number will more than double in the next 20 years to above 33,600 a/c in 2032.
  • 2/3 of the population of the emerging countries will take a trip a year in 2032.
  • Domestic travel in China will be the largest traffic flow in 2032 with almost 1,400bn RPK, or 10% of the World’s traffic.
  • The A20 family: a take-off every 2.5 seconds, with 99.6% reliability.
Trips per capita vs. GDP per capita (source: Airbus GMF).

Trips per capita vs. GDP per capita (source: Airbus GMF).

As I do every year, I strongly recommend both documents (GMF and CMO) which provide a wealth of information of market dynamics. In case you find it tough, to read those kind of booklets, you may take a look at the video of the press conference, a great class on global economy, world aviation, forecasting, trend spotting (1h08’28”):

http://www.youtube.com/watch?v=LSrKZhdzgI4#t=035

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Pima Air and Space Museum

Pima is a county in the South of Arizona, where the city of Tucson is located. Tucson is home of the Davis-Monthan Air Force Base, where the US Air Force’s 309th Aerospace Maintenance and Regeneration Group (AMARG), known as “The Boneyard”, is located. I wrote about the Boneyard in a previous postIn order to visit the Boneyard, you need to visit the Pima Air & Space Museum and that is how I got to know about the museum.

The description of the museum from their website states (the emphasis is mine):

“The Pima Air & Space Museum is one of the largest aviation Museums in the world, and the largest non-government funded aviation Museum in the United States. You’ll see more than 300 aircraft and spacecraft including many of the most historically significant and technically advanced craft ever produced, both from the United States and throughout the world.”

Pimar Air & Space Musem (Tucson, AZ).

Pima Air & Space Museum (Tucson, AZ).

The museum has 6 hangars and one space gallery, plus an impressive exhibit outdoors, which can be visited with a tram or on foot (or both). You can see in the map below the arrangement of the museum:

Pima Air and Space Museum map.

Pima Air and Space Museum map.

Together with the plan the visitor is handed an inventory of the aircraft on exhibit and where are they located (in which hangars):

Pimar Air and Space Museum inventory.

Pima Air and Space Museum inventory.

As you can see from the inventory above, the list of aircraft exhibited at the museum is simply impressive, overwhelming. Add to that, that in this museum you can get as close to the aircraft as you wish.

In the website of the museum you can find brief explanations of each of the aircraft on exhibit (here). This aircraft index can be surfed very handily ordering the aircraft by different criteria. The information about them includes some technical specifications, a brief historical explanation and a picture of the aircraft (I would almost say that it makes up for a visit of the museum). A very good job on the part of the museum curators.

Some of the highlights (in my opinion) of the museum:

Find some pictures I took of some of these aircraft and others in the slide show below:

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The Pima Air & Space Museum has also facilities to restore the aircraft they get and bring them to a decent status to be put on exhibition. Some of the aircraft are on loan from the US Air Force Museum.

Within the museum there are plenty of US armed forces veterans willing to share with you detailed explanations or anecdotes from any of the aircraft. The tram visit of the outdoor exhibit is guided by one of these veterans… no need to say that the experience is fantastic.

It goes without saying it, that I strongly recommend to visit this museum as it is one of the best aerospace museums that I have ever visited. Couple that with the visit to the Boneyard and it is definitely a must for aerospace aficionados.

Finally, some tips to visit the museum:

  • plan your visit as early as possible (doors open at 9am),
  • allow yourself no less than 5 hours to comfortably visit the museum,
  • if the visit is in summertime, bring a bottle of water with you (which can be refilled in any of the many sources inside the museum),
  • plan to have lunch in the museum,
  • book yourself a place both in the tram to visit the outdoor exhibit and in the bus to visit the Boneyard (for this a photo ID will be necessary), as tickets sell out, be there at 9am.

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Twin-aisle aircraft deliveries 20-year forecast

I read in the following article “Airbus seeks to increase Washington State supply business; aims for 13 A350s/mo” (from Leeham News) how from a presentation of a A350 supplier (ElectroImpact) at an aerospace suppliers event in Washington State, it was concluded that the Airbus aimed at building 13 A350s per month, as the mentioned supplier had built its factory with capacity to extend production rates up to those 13 aircraft.

This would be news because in its presentations Airbus talks about a production ramp-up up to 10 a/c per month (as does Boeing for the 787, which 10 aircraft/month should be reached by the end of 2013).

Having analyzed several times Airbus’ Global Market Forecast (GMF) and Boeing’s Current Market Outlook (CMO), I believe that those production rates of above 10 aircraft per month should be expected by industry followers just by seeing the numbers included in those forecasts.

In 2012, the GMF forecasted about 6,500 twin-aisle to be delivered in the next 20 years. The CMO indicated 7,210 aircraft. In 2013, Boeing CMO slightly reduced the figure to 7,130 a/c.

Comparison of Airbus GMF and Boeing CMO 2012-2031.

Thus, both companies expect between 6,500 to 7,200 twin-aisle passenger aircraft to be delivered in the following 20 years (excluding freighters, 747 and A380 – these 2 considered as Very Large Aircraft in the studies).

1st approach. If we were to take the mid-point of both forecasts, about 6,850 a/c, and simply divided by 20 years, we would reach to an average figure of 343 twin-aisle aircraft to be delivered per year between the 2 manufacturers, or 28 a/c per month. If Airbus wanted to maintain the long-term 50% market share, it would have to aim at delivering 14 a/c per month between all its twin-aisle products, which soon will be A330 and A350.

2nd approach. However, current twin-aisle production levels are in no way close to those 343 a/c per year. In 2012 there were 258 deliveries thanks to the introduction of 787s, but in the previous decade the average was about ~165 a/c per year. Thus, manufacturers must have a deliveries’ ramp up to accommodate those 6,850 in the next 20 years. Not knowing what that ramp-up is, I just linearized from where we are today and what is to be delivered.

I plotted in the graphic below all the deliveries of twin-aisle (excluding Very Large Aircraft) from the 1970s to 2012, and then what a forecast could be departing from 2012 deliveries’ figure to accommodate ~6,850 a/c in the next 20 years.

Taking a look at the graphic, one can already understand that if we take the GMF and CMO forecasts as good ones, the manufacturing rhythm will have to accelerate in the following years, especially in the second decade. In the late 2020s, over 400 twin-aisle would have to be delivered per year (over 33 per month), thus manufacturers will have to churn above 16 a/c per month each, that is the double of what they produced during the last decade.

Twin-aisle deliveries: historic series (1970s-2012) and forecast (excludes VLA -A380  & 747).

Twin-aisle deliveries: historic series (1970s-2012) and forecast (excludes VLA -A380 & 747).

Market shares. One could wonder whether this growth will favour more one company or the other. I compared market shares (excluding VLA):

  • in 2012: Boeing delivered 155 twin-aisle (26 767s, 83 777s, 46 787s) vs. Airbus 103 a/c (101 A330s, 2 A340s)… 60% / 40%.
  • in 2003-2012: Boeing delivered 839 twin aisle (148 767s, 642 777s, 49 787s) vs. Airbus 880 a/c (44 A300s, 687 A330s, 149 A340s)… 48% / 51%.
  • in 1993-2012: Boeing delivered 1,687 twin aisle (572 767s, 1,066 777s, 49 787s) vs. Airbus 1,521 a/c (175 A300s, 31 A310s, 938 A330s, 377 A340s)… 50% / 45%.

[The shares in the past decades include marginal deliveries from Ilyushin models and McDonnell Douglas models, which share I kept out of Boeing even after the merger in august 1997, these are ~30 a/c to be added to the 1,687]

Seeing that market shares have been fluctuating but always around 40-60% for each company, they could expect to have to at least deliver 40% of those 6,850 a/c in 20 years, or of those above 400 a/c in the late 2020s.

Backlog. Finally, just to see how the twin-aisle mix for each company is going to be, let’s look at the aircraft on order (backlog) that each company has as of today (end June 2013):

  • Airbus (43%):
    • A330: 260 a/c to be delivered.
    • A350: 678 a/c to be delivered.
  • Boeing (57%):
    • 767: 56 a/c to be delivered.
    • 777: 339 a/c to be delivered.
    • 787: 864 a/c to be delivered.

Thus, of the 6,850 twin-aisle to be delivered in the next 20 years, about 2,200 are already contracted as of today (plus the above 130 a/c delivered within the first half of 2013), thus 33% of those 6,850 a/c is more or less secured and among those the split is 57 / 43 for Boeing.

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