Tag Archives: CMO

Aircraft market forecasts accuracy (update 2014)

About two years ago I wrote a post in which I analyzed the accuracy of commercial aircraft market forecasts. In particular, Boeing’s series of yearly Current Market Outlook (CMO). In that comparison, between the CMOs from 1997 and 2012, we could compare the predicted and the actual world fleets at 2011 year-end. Except for the twin-aisle segment and especially the large aircraft sector, the accuracy was remarkable, as the estimated global fleet only exceeded the actuals in 1%.

In this post, I just wanted to provide an update with the figures from the latest CMO (2014), released a few weeks ago, in comparison with 1999’s CMO. In that CMO from 1999 [PDF, 1.5MB], we find the following chart showing Boeing’s forecasted fleet size and distribution for 2003, 2008, 2013 and 2018 year-ends.

1999 Boeing CMO year-end fleet forecasts for 2003, 2008, 2013 & 2018.

1999 Boeing CMO year-end fleet forecasts for 2003, 2008, 2013 & 2018.

In 2014 CMO, Boeing offered figures of 2013 year-end fleet (1).

Fleet at year end 2013 - Boeing 2014 CMO.

Fleet at year-end 2013 – Boeing 2014 CMO.

And now, the comparison is immediate:

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).

Some reflections:

  • The forecasts for all segment except for single-aisle (737-800) predicted higher numbers of aircraft in the fleet than the actuals have shown 15 years later (2).
  • The total fleet figure was missed by 11%, a larger deviation than the 1% from two years ago.
  • The 737 has been the model outselling the forecasts, offsetting partially the lower demand in all other segments. In particular, even if deviations per segment have been higher, the global forecasted figure for passenger aircraft has been missed by only 3%.
  • The forecast is especially off mark the twin-aisle, where there are over 1,700 less aircraft in the current fleet than forecasted (3).

For the next such comparison we will need to wait some years, as from the year 2000 Boeing provided CMOs in a different fashion, offering a view of the forecasted fleet only 20 years from the date in question, instead of a view every 5 years. Therefore, we will have to wait until 2017, when we will be able to compare the 20-year forecast from 1997 CMO with the actuals of 2016 to be provided in 2017 CMO.

(1) In order to see the detailed split per segment differentiated between passenger and freighter aircraft, until the released of the full CMO, it is needed to use the exploring data tool offered in Boeing’s site.

(2) The differences in accuracy between the lower and higher end of the small-aisle segment should not be taken into account, as they are influenced by the different consideration of the cut off number of seats between a CMO and the other.

(3) Possibly a reason why Boeing plays down on the 747-8I and A380 segment.

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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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Is the average aircraft size decreasing or increasing by 25%?

Last year, I wrote a post (Aircraft average size: Boeing’s forecast in 1990 and following evolution) in which I compared what was Boeing’s prediction in 1990 of what was going to be the commercial aircraft average size evolution in the next 15 years versus the same prediction in 1997 and what had been the actual evolution through 2011, as reflected in Boeing’s 2012 Current Market Outlook (CMO).

See the graphics below:

Average aircraft size forecast made in 1990.

Average aircraft size evolution 1991-2011, according to Boeing 2012 CMO.

As I mentioned above, the information of actual evolution was provided by Boeing in 2012’s CMO.

This year (2013), Airbus seems to have responded by providing the same piece of information in its Global Market Forecast (GMF), see the picture below:

Average aircraft size evolution 1992-2012, according to Airbus.

Average aircraft size evolution 1992-2012, according to Airbus 2013 GMF.

The catch then is: is the average aircraft size decreasing (as Boeing says) or increasing by 25% (as Airbus says)?

The best part of the catch is that both cite the same source of information, OAG (Official Airline Guide).

The reader will obviously reach to the conclusion that both companies cannot be taking the same segmentation and that they are using the reported trend to convey an interested message.

After, having seen the number plays that Boeing has recently done in their CMO with the mix of wide-bodies widely changing from year to year in order to promote 787 or 777 (which explained in this post), I take the stand to take with grain of salt the graphic provided by Boeing, and thus, unless I see the numbers by myself, I will understand that average aircraft size has been growing since the 1990s (1).

(1) The funny thing of understanding that the correct interpretation is the one of Airbus (average size has grown by 25%) is that this would mean that Boeing’s own prediction in 1990 would have been proven correct! 🙂

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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”):

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A380 sales compared to 747 sales at program start

Some weeks ago, in a discussion with a colleague we tried to put into context whether the A380 sales were such a dismal or not.

My colleague first plotted A380 orders since the program launch (2001) in comparison to those of the 747 (1966). I show below the result:

A380 and 747 orders referenced to the year of launch of each program.

A380 and 747 orders referenced to the year of launch of each program.

Both programs show an initial sales rush at the time of program launch. In both cases the rhythm of sales slowed down after the second year. In the first 11 years of program, each had managed:

  • A380: 262 orders.
  • 747: 357 orders.

Thus, we can see that the Boeing 747 was selling better already from the beginning of the program.

However, I wanted to make yet another comparison: aircraft orders taking as reference the year of first delivery, having heard so often the industry mantra that some potential customers would want to wait to see the aircraft in operation before placing orders. See below this second comparison:

A380 and 747 orders referenced to the year the 1st aircraft delivery of each program.

A380 and 747 orders referenced to the year the 1st aircraft delivery of each program.

In this case, and due to the shorter time to develop the Boeing 747 since program launch (1966), the difference in sales is narrowed:

  •  A380: 262 orders.
  • 747: 281 orders.

You can see that still, 5 years after the 1st delivery of each aircraft (2007 for the A380 and 1969 for the 747) Boeing had sold more aircraft, but with this reference the margin is lower, 19 aircraft.

Boeing 747. The Boeing 747 was the first wide-body in commercial aircraft history and still is the twin-aisle with the highest amount of aircraft sold (1,528 a/c as of today, probably to be soon overtaken by the 777) and delivered (1,464 a/c as of today). However, it has taken over 40 years to reach those numbers. The 1,000th unit sold was reached after 25 years of sales in 1990. The 1,000th unit delivered was also reached after 25 years of aircraft deliveries, in 1993.

Thus, in my opinion, when we want to measure the success of the A380 we cannot be distracted by the figures of other commercial aviation segments (single-aisle and small / intermediate twin-aisle) but we have to check what the 20-year forecasts for the Very Large Aircraft say:

  • ~1,300 aircraft according to Airbus GMF,
  • ~600 aircraft according to Boeing CMO,

and then see what could be expected market share for the A380 against those forecasts and whether it is getting the orders to reach it or not.

You can find orders and deliveries figures in both manufacturers websites or summarized here: A380 and 747.

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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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Wide-body mix in 15 years of Boeing CMOs

A couple of days ago I wrote about the publishing by Boeing of its Current Market Outlook for 2013-2032. In that post I made a very brief review of it, and mentioned that I was puzzled by the change in the predicted mix of twin-aisle sales, between small and medium wide-bodies. To recall the numbers:

  • small wide-bodies: from 2,720 a/c in CMO2012 to 4,320 a/c in CMO2013, whereas,
  • medium wide-bodies: from 4,490 a/c in CMO2012 to 2,810 a/c in CMO2013.

Since I keep a collection of CMOs from years back, I decided to compare the figures of this wide-bodies mix along the last 15 years…

Twin-aisle mix distribution (Boeing CMO 1998-2013).

Twin-aisle mix distribution (Boeing CMO 1998-2013).

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 2013, 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 2013

Last week, just ahead of Le Bourget air show, Boeing Commercial published its yearly update of the Current Market Outlook (CMO) for the next 20 years of commercial aircraft market (2013-2032).

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

CMO 2013 vs 2012 comparison.

CMO 2013 vs 2012 comparison.

Some comments to it:

  • You can see that the total number of new aircraft delivered has slightly increased from 33,060 to 34,430, a 4%, which is consistent with the constant 5% traffic increase that Boeing predicts.
  • The volume (Bn$) increases by a larger percentage, 9% (380 Bn$)… this is due mainly to the double increase in:
    • (1) single-aisle aircraft expected sales 6,2% (+1,430 aircraft), and
    • (2) the average price list with which the list is computed, another 6.3% (from 87.3m$ to 92.8m$)
  • I am puzzled to see the the sudden change in the predicted mix of twin-aisle sales, between small and medium wide-bodies…
    • small wide-bodies: from 2,720 a/c in CMO2012 to 4,320 a/c in CMO2013, whereas,
    • medium wide-bodies: from 4,490 a/c in CMO2012 to 2,810 a/c in CMO2013
    • as you can see the combined figure slightly changes (7,130 vs. 7,210), however the distribution among the two categories is drastically changed. Why is that? A question to Randy Tinseth that he did not address in his blog when the CMO was unveiled.

I would tend to think that the move is done to push some market development based on some models (787) instead of others (777), but given that it is precisely now when the upgraded versions of the 777 are supposed to be pushed into the market I fail to see the logic behind this.

Find below the nice infographic that the guys from Boeing have put up together:

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, 9.6 MB], the booklet [PDF, 3.0 MB] and the file [XLS, 0.4 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 2012 market studies.

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World commercial aircraft fleet: forecast vs. actual

Some weeks ago I made a comparison about Airbus and Boeing aircraft market forecasts. Last week I published a couple of posts about the evolution in the forecasted aircraft average size and on the accuracy of these market forecasts. For this, I looked for old issues of Boeing Current Market Outlook from as back as 1990.

The next step then it was obvious, I compiled the following graphic showing with the data available information over a 40-year span on:

  • The evolution of world commercial aircraft fleet year by year (blue line) from 1995 to 2011,
  • The forecasted world aircraft fleets by Boeing CMO (red line) from 2000 to 2031 (with some gap years). For 2015 to 2031 the forecast was made 20 years ahead; for 2010-13 it was made 15 years ahead; for 2005-2008, 10 years ahead and for 2000-2003, 5 years ahead.
  • The published 20-year aircraft market forecast year by year.

World commercial aircraft fleet: forecast vs. actual (data source: Boeing CMO).

As you can fleets, forecasted fleets and market fleets have all been increasing year by year. The compounded annual growth rate (CAGR) for each one has been:

  • Actual fleet growth: 3.73% from 1995 to 2011 (2.88% from 2000 to 2011).
  • Forecasted fleet growth: 3.55% from 2000 to 2031 (3.69% from 2000 to 2011).
  • 20-year market forecast: 5.07% from 1992 to 2012 (3.43% from 2001 to 2012).

It is interesting to see that in those years when there is both figures for actuals and forecasted fleets the figures are close (-3.3% average deviation) and so is the trend, though forecasted fleet was lower at the beginning of that period (-7.2% in 2000) and grew at a higher rate until almost matching the numbers in 2011 (+1.2%).

Even though, the 20-year market forecasts have grown at a higher rate than fleets, it is mainly because the first data that I could retrieve come from the economic crisis of the beginning of the 1990’s, when Boeing trimmed down its forecasts. From the 2000’s the figures for market forecast have grown at a similar rate than those of fleets. And so will be the growth of forecasted fleet from 2011 to 2031: 3.5%.

****

Notes:

  • 1990 CMO long-term market forecast is made for 15 years, not 20.
  • Forecast of fleet for the periods 2000-2003, 2005-2008 and 2010-2013 does not come from CMOs published 20 years before, but from 5, 10 and 15-year fleet forecasts included in the CMOs of 1996, 1997, 1998 and 1999.
  • Boeing does not publish 5, 10 and 15-year fleet forecasts anymore.
  • It would be interesting to have a per-segment graphic, however there is not consistent data to produce it for the same time span. Boeing changed singe-aisle cut-off seat size from 1999-2000, in 1996-1997 and 2008 didn’t report the split within twin-aisle, in 2008 it also didn’t report the split within single-aisle.

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