Large planes falling out of fashion

Boeing revises down forecast for its 400+ seaters, while Airbus will build just 12 of its giant A380s a year starting from 2018, down from 27 in 2015

PUBLISHED : Wednesday, 13 July, 2016, 9:09pm
UPDATED : Wednesday, 13 July, 2016, 11:42pm

Large jetliners appear to be going out of fashion, according to the world’s two largest aircraft makers.

At the annual Farnborough International Airshow this week, the two manufacturing giants both logged huge orders from Asian airlines for smaller planes.

They included a knockout US$12.6 billion order for 100 Airbus single-aisle A321neos from budget carrier AirAsia, and a US$7.7 billion order for 72 A320neos from Indian low-cost carrier, GoAir.

Boeing, which also announced a series of accords with Chinese customers including Xiamen Airlines and Ruili Airlines at the show, raising its annual 20-year global aircraft demand outlook by 4.1 per cent this week.

It predicts the world will need 39,620 new airplanes worth US$5.9 trillion in the next two decades, but it continues to revise down forecast demand for large jets with more than 400 seats such as its B747-8. Compared with its forecast last year, it also lowered the number for medium large jets with 300-400 seats from 3,520 to 3,470.

“The single-aisle market will be especially strong, with low-cost carriers and emerging markets driving growth,” Boeing said, which forecast 28,140 new airplanes worth US$3 trillion will be needed in this segment, an increase of more than 5 per cent over last year.

The single-aisle market will be especially strong, with low-cost carriers and emerging markets driving growth
Boeing statement

Airbus, which makes the world’s biggest commercial airliner, the A380 double-decker, said it would build just 12 of the giant planes a year starting from 2018, down from 27 in 2015, within its own predictions which forecast “a trend towards higher capacity aircraft”.

It also lowered its forecast demand for the very large passenger and freighter aircraft combined, by nearly 5 per cent from 1,550 to 1,480.

Thomas Kaplan, an analyst with consultancy Flightglobal Ascend, said: “The Boeing and Airbus forecasts have traditionally diverged in their opinions for the largest passenger widebodies, with Airbus much more optimistic. This is unsurprising, given they have the only Very Large Aircraft – the A380 — in production.”

The A380, seating up to 600, is “a lot of seats to fill and has a high capital cost”, he said, lending itself mostly for use on the busy trunk routes such as those between Asia and Europe.

“The customer base is limited, as is always the case the larger an aircraft gets,” Kaplan said.

The core of future aircraft demand is for smaller widebodies, typically around 300-350 seats, according to Ascend. “These have the flexibility to operate on many routes and offer frequent service on trunk routes including intra Asia, transatlantic and transpacific,” he said.

Boeing expects the world will need 5,100 such planes in the next 20 years, up from 4,770 in its 2015 forecast.

Mark Lapidus, chief executive of Amedeo, which specialises in leasing widebody planes, disagrees that larger aircraft have diminishing appeal. He pointed out that Boeing’s upcoming B777-9x and a possible -10x model under study are getting bigger and bigger compared with their predecessors.

“The A380 is an aircraft some people make a lot of money with, some have struggled, and some are afraid to order or lease. It in particular is a brand-defining aircraft which ... keeps customers happy. That will bode well for the A380,” he said.