As we come to the close of January 2012, we feel that it is time to look back at the successful month enjoyed by both original equipment manufacturers (OEMs)from an aircraft orders perspective.
Net Orders: 102
A320neo: 100 (Norwegian- 100)
A330-200F: 2 (Etihad Airways-2)
Airbus also firmed up orders from Latin American carriers Volaris and Avianca/TACA for 44 (30 neo, 14 A320 “classic”), and 51 (33 neo, 18 A320 “classic”) aircraft respectively. These orders were announced in 2011, and their re-announcement has to do with all of the confusion between “commitments” and orders. Thus as they stand right now, Airbus’ backlog of A320neos stands at 1384 firm orders, and 80 “commitments” or MOUs for a total of 1,464 planes from 26 customers.
Etihad was the launch customer for the A330-200F and became its launch operator at the 2010 Farnborough Air Show. This order brings the backlog for A330-200 freighters to 53 aircraft.
Net Orders: 148
737: 40 (Norwegian-22, Jet Airways-17, Virgin Australia-1)
737 MAX: 100 (Norwegian-100)
787: 10 (Unidentified customer(s))
777: -2 (Jet Airways cancels 2)
The 737NG continues to sell at decent clip, perhaps due to the continued filling of delivery positions at both Airbus and Boeing; customers seeking neo or MAX will now have to wait until almost 2019 to acquire delivery slots in significant numbers. The orders bring the 737 MAX to more than 1,000 orders and commitments for the MAX from 15 customers.
Jet Airways’ cancellation of the 777-300ER is sad, but was almost a foregone conclusion; the aircraft is just too big for Jet’s needs. The swap to 737s is also expected; Jet appears committed to continual short-haul capacity growth despite the severe competition on those sectors. However, the 777-300ER did win a new “order” of sorts, with Saudi Arabian Airlines confirming that it was the customer for 8 777-300ERs ordered in 2011 that had been marked as unidentified by Boeing. An order from Air France-KLM for 25 Boeing 787-9s was also finalized.
Saturation of delivery slots and split orders
The strong order-books for both the neo and the MAX for the month are indicative of a saturation of delivery slots. As we mentioned above, delivery slots for both aircraft are essentially sold out through 2019. (A320 neo has about 450 more sales (*estimate) and will enter service a year before the 737 MAX assuming schedules are met). This has some very interesting implications. If current A320 customers continue to order the neo as a replacement, at what point do big A320 operators like United (who has an RFP for 200 narrow bodies out), IAG, and Air France/KLM begin to consider the MAX purely for timing purposes? Moreover, do the (hypothetical) increased acquisition costs driven by scarcity and high demand for delivery slots make Bombardier’s C-Series, COMAC’s C919, or even Irkut’s MS-21 viable options for first-tier carriers to consider?
Meanwhile, what is behind the trend of split orders between the two OEMs? First it was American Airlines, and now Norwegian; doesn’t it seem like a lot of the big orders are being split between Airbus and Boeing. Ultimately, this issue probably boils down to the issue mentioned above; neither OEM can deliver airplanes as fast as the airlines want them.
Regardless of the long term concerns, January was a very good month for the world’s two largest aircraft manufacturers.