As Airbus and Bombardier move through, what appears, to be a smooth transition, what might one start thinking about in terms of the market? Currently, it looks like the CS program will be under the Airbus flag by Farnborough.
For Airbus, the most logical place to see opportunities for the CS program will among its own customers. Specifically, those who use the A318 and A319. The former is easily replaced by the CS100 and the latter by the CS300. While the new CS partnership will chase every deal that pits them against Boeing, it makes sense to see any aging Airbus as a lower hurdle to keep “on-side”.
The table lists the fleet as at year end 2017. The A318 was not a great success but has the right profile for replacement by the CS100, which is a far more capable aircraft. The A319 has been a much better market success and the CS300 is a good replacement. The A319 is clearly the far more important market. We are sanguine about the future of the A319neo.
Together Airbus should be able to deliver nearly 1,500 replacement orders to the CS program. This is encouraging. The problem is that these Airbus models are well under 15 years old, which is the time when they start to retire. Moreover, the A318 and A319 have no second life as freighters. Consequently, owners run them until they are done. The largest parked fleet of A319s at December 31st was Eurowings with nine.
Since fuel prices have remained manageable for airlines, and new deliveries have run late, existing aircraft have remained in demand. This was a theme repeated at the recent ISTAT Americas event. Of the 47 parked A319s, 11 are over 15 years old. Some are owned by lessors. It seems reasonable to think these aircraft will likely be parted out. Even so, only 3.3% of the A319 fleet is parked.
Airbus, therefore, has something of an uphill battle when it comes to replacement marketing. Making things worse, Bombardier does not seem to be able to deliver fast enough as it is. The need for more production capacity is clear. The Alabama FAL is needed to support the expected US demand.
There is US demand pending – American alone has 123 A319s averaging 12.4 years old. Many of those are ex-US Airways and really old. Besides the A319 has not proven popular at American. Many orders were converted to the A321. More pending demand are the ex-Northwest A319s at Delta. There 57 averaging 16.3 years old. Delta has already started to solve that problem. United has 66 A319s averaging 16.4 years old. The US offers lots of low hanging fruit you might think.
There are other targets that are equally attractive. One of the key targets is an old Airbus favorite – Air France. Air France has 56 A318s (18) and A319s (38) and this airline is seen as a key opportunity for Airbus and the CS program. The other “half” of Air France/KLM is firmly in the Embraer camp for this segment.
Another key target for Airbus would be the Lufthansa Group which has 109 A319s averaging 12.8 years. Fortunately for Airbus, group member SWISS was the launch customer for the CS. The airline is pleased with how the aircraft performs, although as the link about shows, less happy with the Mirabel deliveries.
If Mirabel keeps struggling with deliveries, we might expect the Alabama FAL to be moved along smartly. However, considering the supply and potential demand, is a FAL in Toulouse or Hamburg off the table?
The forthcoming air show this summer is bound to drive more interest than usual.