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THE LARGE aerospace trade
events are like staging posts
through the years, markers
along the path of the industry’s
ongoing development.
This year’s big industry
showcase at Farnborough in
mid-July, takes place at an
interesting time. The two major
commercial aircraft original
equipment manufacturers
(OEMs), Airbus and Boeing, both
have brimming orders backlogs,
but fuel prices are climbing
once again and decisions on
replacements for some aircraft
are looming, opening the
possibility for new business.
Production slots for most of the
products from Airbus and Boeing
are booked out well into the
future, thanks to the time earlier
this decade when each company
pulled in ever increasing orders
totals each year, culminating with
the 2014 total of 2,888 aircraft
(1,456 Airbus, 1,432 Boeing), the
most orders ever received bythe big two OEMs in a single
year. (The 2014 total edged the
previous record of 2,754 aircraft
set in 2007.)
There were a couple of years
where the orders rate dropped
o (1,848 orders in 2015 and
1,399 in 2016, although orders
rose again to 2,021 in 2017 with
1,109 Airbus and 912 Boeing). The
slowdown happened because
customers’ immediate needs had
been satisfi ed, full production
slots meant availability was
pushed into the future, and there
was a changing macroeconomic
picture. Just as rising oil prices
from the late 2000s fuelled
orders for newer aircraft, as oil
fell from its peak price of $120/
barrel in 2012 (down to below
$60/barrel by 2016, according
to International Air Transport
Association’s (IATA) Jet Fuel Price
Monitor), so the rush for fresh
equipment slowed as it became
less urgent to replace older, less-
e cient jets.Now, oil is back up at above
$90/barrel, its highest price for
four years. Should prices remain
at a higher level or rise further,
it seems inevitable demand will
pick up again for more e cient
new aircraft.
During the annual IATA Annual
General Meeting in June, Reuters
quoted Boeing Commercial
Airplanes Vice-President
Marketing Randy Tinseth as
saying: “When you take a look
at where the price of fuel is
today... it means replacement
economics make more sense for
our customers.”
Inevitably, operators with
less fuel-e cient equipment,
especially aircraft delivered
from the mid-1990s to the early
2000s, will have to think about
how they will replace ageing
fl eets with newer aircraft to arrive
in the next decade.
As explained in the separate
feature in this issue, some airlines
have already taken re-fl eetingdecisions on widebody twin-aisle
aircraft. There will be continued
opportunities in the widebody
market, but this is far from the
only area where there will be
replacement requirements.
One segment that stands out
is the so-called middle of the
market for aircraft sized between
the highest-capacity single-aisle
types and the smallest-capacity
twin-aisles, the airliners which,
broadly speaking, carry 220
to 280 passengers and can
fl y transcontinental and some
intercontinental services.
With the Boeing 757s and
Boeing 767s and legacy Airbus
A330s that currently serve this
market becoming older, there will
over the coming years be a need
to restock and this makes the mid-
market segment a likely focal point
for future competition between
the big OEMs.
At last year’s Paris Air
Show, Boeing spoke about a
confi guration study for a NewMarket moves
An upcoming need to replace ageing midsize airliners, such as this Delta Air Lines Boeing
767, photographed on approach to London Heathrow, could become one of the key
battlegrounds in the commercial aircraft market. Carlos Enamorado/AirTeamImages