Airbus has reported its O&D through August. (Boeing only has data through July for download as of today) Taking a look a the Airbus numbers highlights some important issues.
- 2015 was a decent year for orders, but down from record levels earlier this decade. 2016 is off last year’s pace (-38%). Orders have dropped essentially to the same level as deliveries, so backlog is no longer increasing at a rapid pace.
- The A318 and A319 seem to have lost market favor. Much to the joy of Bombardier and Embraer.
- The A320 program saw the biggest order decline, both for ceo and neo.
- The A321 has seen good order pickup – ceo orders are up 318% and neo orders up by 44%. Even if these deals are priced aggressively, Airbus is creating market momentum. The A321neo in particular looks to be the rising star and is the current 757-200 replacement and de-facto MoM airplane.
- A330 orders softened considerably, -56% for the passenger model and no orders for the freighter. This program has delivered very well for Airbus. As the A330neo gets closer to EIS, we expect to see interest jump again.
- The A350 saw a good order pick up as well – from only three in 2015 to 33 in 2016. Airbus has a lot riding on this program and operators of the new aircraft seem to be pleased with its performance. We expect to see the order book grow as the program delivery schedule issues are solved.
- The A380 program order book has again been blank. No doubt this is a cause of great concern in Toulouse. Just like Boeing kept the 747 program ticking over, Airbus will do the same for the A380. We believe the market will catch up with the A380 yet.
In terms of deliveries, Airbus has kept its rates basically stable. This is a point that COC John Leahy makes regularly as a sign of being a reliable and steady vendor.
- Starting at the smallest models, the A318 saw no deliveries – but then are no orders. We think this program is over. The A319 saw a drop from 21 deliveries to 3. This program may also be approaching its demise.
- The core A320 program saw a 5% decline in ceo deliveries – but if we add ceo and neo together, deliveries were up 4%. The switch from ceo to neo has begun and as ceo deliveries decline, neo deliveries will rise. A GTF engine supply chain problem is slowing deliveries. The GTF problems are a concern for Airbus, but being managed quietly. Only one customer has made a fuss from the start. Airbus and P&W will work through this with penalties paid to customers to help offset their frustration. The program is central to Airbus’ business, so deliveries are getting the attention they need.
- The A321 program is bustling – deliveries are up 21% for ceo. Since most A321s come with the V2500, P&W at least has some good news. A321neo deliveries start soon, which will be important for this increasingly popular model.
- On the A330, deliveries are down 37%, which is substantial. Airbus has the A330 FAL running as smoothly as they have for the A320. Slower deliveries are running in sync with fewer orders. But with the switch to neo coming, as orders recover, so will production.
- The A350 has been a bright spot, with deliveries rising from 4 to 21. Slow deliveries are due to cabin structures running late. Once again, customers are being compensated. But the delays have earned public rebuke from the CEO and one vendor has been removed as a supplier. Airbus has a lot riding on this program, and supply chain struggles have hampered what was a mostly excellent flight test program and smooth EIS. The new -1000 is now about to enter flight test. Airbus will pour resources into ensuring the program stabilizes fast. Boeing will give them no quarter, so stumbles are costly.
- The A380 program is stable in production terms, being slowed to better pace with the backlog and the earnest work on getting new orders. The sales team must be under tremendous pressure.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.