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Airbus vs. Boeing, comparison of market forecasts (2016)

Last week, on the first day of Farnborough air show, Airbus released the new figures of the 2016-35 Airbus’ Global Market Forecast (GMF, PDF 2.6 MB). This is good news, as it did so at the same time as Boeing released its Current Market Outlook (see a post here about it) and before it used to do so in September.

In previous years, I have published comparisons (1) of both Airbus’ and Boeing’s forecasts (Current Market Outlook, CMO, PDF 4.1 MB). You can find below the update of such comparison with the latest released figures from both companies.

Comparison of Airbus GMF and Boeing CMO 2016-2035.

Comparison of Airbus GMF and Boeing CMO 2016-2035.

Some comments about the comparison:

  • Boeing sees demand for 12% more passenger aircraft (excluding regional a/c) with a 10% more value (excluding freighters). The gap is higher than in 2015 (similar to 2013 and previous years).
  • In relation to last year studies, Airbus has increased demand by ~650 aircraft whereas Boeing has increased by 1,670.
  • Boeing continues to play down A380 niche potential (66% less a/c than Airbus’ GMF).
  • Both companies’ forecast for the twin aisle segment is nearly identical: ~7,600-7,700 aircraft (Airbus sees demand for about a 100 less aircraft than Boeing, mainly due to Boeing increased figures in relation to 2015). The mix between small and intermediate twins varies, ~300-400 units up and down. However, Boeing’s wide-bodies mix is not to be taken as engraved in stone, see the erratic trend in the last years here.
  • On the other hand, Boeing forecasts about 4,600 single-aisle more than Airbus (the gap has widened in 800 units this year). Boeing doesn’t provide the split between more or less than 175 pax capacity airplanes since its 2015 CMO, this year Airbus hasn’t included it either.
  • In relation to traffic, measured 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 2035 ~16.0 RPKs (in trillion, 4.5% annual growth from today) while Boeing forecasts 17.01 RPKs (4.8% annual growth).

The main changes from last year’s forecasts are:

  • Both manufacturers have increased their passenger aircraft forecast in between ~650-1,670 a/c.
  • Both manufacturers have increased the volume (trn$) of the market in these 20 years, by about 300-400 bn$.

Some lines to retain from this type of forecasts:

  • Passenger world traffic (RPK) will continue to grow about 4.5% per year (4.8% according to Boeing). This is, doubling every ~15 years.
  • Today there are about 18,019 passenger aircraft around the world (according to Airbus; 18,190 in Boeing’s CMO), this number is about 700 a/c more than the year before (4% increase) and will more than double over the next 20 years to 37,708 a/c in 2035 (39,750 as seen by Boeing, excluding regional jets).
  • Most deliveries will go to Asia-Pacific, 41% or 13,239 passenger aircraft (according to Airbus).
  • Domestic travel in China will be the largest traffic flow in 2035 with over 1,600 bn RPK (according to Airbus (x 3.7 times more than today’s traffic), or 1,897 bn RPK according to Boeing), or 11% of the World’s traffic.
  • About 12,830 aircraft will be retired to be replaced by more eco-efficient types.
Passenger traffic growth vs. global GPD growth.

Passenger traffic growth vs. global GPD growth.

As I do every year, I strongly recommend both documents (GMF and CMO) which provide a wealth of information of market dynamics. This year, Airbus included as well an excel file with its data, find it here [XLS, 0.3 MB]

(1) Find here the posts with similar comparisons I made with the forecasts of previous years: 2015, 2014, 2013, 2012, 2011, 2010.

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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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Airbus vs. Boeing, comparison of market forecasts (2015)

Few days ago, Airbus released the new figures of the 2015-34 Airbus’ Global Market Forecast (GMF, PDF 7.2MB).

In previous years, I have published comparisons of both Airbus’ and Boeing’s forecasts (Current Market Outlook, CMO, PDF 6.5MB). You can find below the update of such comparison with the latest released figures from both companies.

Comparison of Airbus GMF and Boeing CMO 2015-2034.

Comparison of Airbus GMF and Boeing CMO 2015-2034.

Some comments about the comparison:

  • Boeing sees demand for 9% more passenger aircraft (excluding regional a/c) with a 10% more value (excluding freighters). The gap is the same as in 2014 (in previous years Boeing forecasted up to 14% more aircraft).
  • In relation to last year studies, Airbus has increased demand by ~1,200 aircraft about the same increase seen at Boeing’s.
  • Boeing continues to play down A380 niche potential (67% less a/c than Airbus’ GMF). This year, Airbus has increased in about 50 units its forecasted demand for the VLA segment.
  • Both companies’ forecast for the twin aisle segment is nearly identical: ~7,500 aircraft (Airbus sees demand for about a 100 more than Boeing). The mix between small and intermediate twins varies, 700 units up and down. However, Boeing’s wide-bodies mix is not to be taken as engraved in stone, see the erratic trend in the last years here.
  • On the other hand, Boeing forecasts about 3,800 single-aisle more than Airbus (the gap has widened in 200 units this year, lower than in 2013 forecasts though). Boeing doesn’t provide in 2015 CMO the split between more or less than 175 pax capacity airplanes.
  • 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 2034 ~15.2 RPKs (in trillion, 4.6% annual growth from today) while Boeing forecasts 16.15 RPKs (4.9% annual growth).

The main changes from last year’s forecasts are:

  • Both manufacturers have increased their passenger aircraft forecast in ~1,200 a/c.
  • Both manufacturers have increased the volume (trn$) of the market in these 20 years, by about 300bn$ or 6.5%(excluding regional jets and freighters).

Some lines to retain from this type of forecasts:

  • Passenger world traffic (RPK) will continue to grow about 4.6% per year (4.9% according to Boeing). This is, doubling every ~15 years.
  • Today there are about 17,354 passenger aircraft around the world (according to Airbus; 17,350 in Boeing’s CMO), this number is about 500 a/c more than the year before (3% increase) and will more than double over the next 20 years to above 35,749 a/c in 2034 (over 37,990 as seen by Boeing, excluding regional jets).
  • Most deliveries will go to Asia-Pacific, 40% or 12,596 passenger aircraft (according to Airbus).
  • Domestic travel in China will be the largest traffic flow in 2034 with over 1,600bn RPK (according to Airbus (x 3.8 times more than today’s traffic), or 1,704bn RPK according to Boeing), or 11% of the World’s traffic.
  • About 13,400 aircraft will be retired to be replaced by more eco-efficient types.
GDP and traffic growth (source: Airbus 2015 GMF).

GDP and traffic growth (source: Airbus 2015 GMF).

As I do every year, I strongly recommend both documents (GMF and CMO) which provide a wealth of information of market dynamics.

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Airbus vs. Boeing, comparison of market forecasts (2014)

Yesterday, Airbus released the new figures of the 2014-33 Airbus’ Global Market Forecast (GMF, PDF 7.5MB).

In previous years, I have published comparisons of both Airbus’ and Boeing’s forecasts (Current Market Outlook, CMO, PDF 5.3MB). You can find below the update of such comparison with the latest released figures from both companies.

Comparison of Airbus GMF and Boeing CMO 2014-2033.

Comparison of Airbus GMF and Boeing CMO 2014-2033.

Some comments about the comparison:

  • Boeing sees demand for 9% more passenger aircraft (excluding regional a/c) with a 10% more value (excluding freighters). The gap is closing, as in previous years Boeing forecasted up to 14% more aircraft.
  • In relation to last year studies, Airbus has increased demand by ~2,000 aircraft whereas Boeing by ~1,000.
  • Boeing continues to play down A380 niche potential (59% less a/c than Airbus’ GMF). This year, both companies have reduced in about 100 units their forecasted demand for the VLA segment.
  • Both companies’ forecast for the twin aisle segment is nearly identical: 7,260 aircraft. The mix between small and intermediate twins varies, 700 units up and down. However, Boeing’s wide-bodies mix is not to be taken as engraved in stone, see the erratic trend in the last years here.
  • On the other hand, Boeing forecasts about 3,600 single-aisle more than Airbus (the gap has closed in 800 units this year). The largest part of the difference comes in the single-aisles over 175 seats (A321, 737-9).
  • 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 2033 ~14.5 RPKs (in trillion) while Boeing forecasts 15.5 RPKs.

The main changes from last year’s forecasts are:

  • Both manufacturers have increased their passenger aircraft forecast, ~2,000 a/c Airbus and 1,000 a/c Boeing,.
  • Both manufacturers have increased the value of RPKs in 2033  (about 5-7%).
  • Both manufacturers have increased the volume (trn$) of the market in these 20 years, about 6.7% Airbus (to 4.4trn$) and 5.7% Boeing (to 4.86trn$) (excluding regionals and freighters).

Some lines to retain from this 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 16,855 passenger aircraft around the world (according to Airbus), this number will nearly double in the next 20 years to above 30,555 a/c in 2033 (over 33,000 as seen by Boeing).
  • Most deliveries to go to Asia Pacific, 39% or over 12,200 passenger aircraft
  • Domestic travel in China will be the largest traffic flow in 2033 with over 1,500bn RPK, or 11% of the World’s traffic.
  • Over 12,000 aircraft will be retired to be replaced by more eco-efficient type.
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.

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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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