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July 20, 2024
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As we all watch carefully while Boeing takes its deliberate steps towards unveiling its NMA, it is useful to see how the market has been behaving.   Markets are not waiting for Boeing it seems, despite we may be hearing.  Fleet decisions are choices made that are lived with for 20 years.  Circumstances change rapidly – like oil prices for example – and traffic is growing above its typical rate.  Airline fleet managers cannot wait for a silver bullet to emerge that somehow will solve their tradeoff dilemmas.  Moreover, OEM backlogs demonstrate that fleet managers and the lessors make moves now because markets require it.

Airbus and Boeing made very smart moves with their recent single-aisle refreshes.   Both OEMs have built about a seven-year backlog in orders at current production.  Because this is too long for them, given their own product refresh cycles, they are planning to speed up production to whittle down these backlogs.

What do the active fleets look like? In the table below we list the in-service models. Next to each of these is the current order for the newer model.

Boeing does not break down the MAX models in their orders, so we have to reconstruct where possible.  There are 1,616 MAX orders with no model number attached.  Note also that both OEMs have big orders listed as “Undisclosed” customer.  This means the Operator bucket in the table understates the numbers of customers with orders.

If we can assume that these Undisclosed customers are roughly equal, we can infer some information from the table.

  • A320/A320neo – ~93% of the A320 fleet is likely to be replaced by the A320neo.
  • A321/A321neo – 117% of the A321 fleet is being replaced by the A321neo.  Clearly, this high number suggests that many customers are moving up from smaller to larger models. It also suggests that this larger aircraft is attracting more customers.
  • 737-800/MAX8 – 50% of the 737-800 market looks like being replaced by the MAX8.  But we would think that at least 1,000 of the 1,616 undeclared orders are likely to become MAX8 orders, driving the number to over 72% of the current 737-800 fleet.   Boeing has a winner in the MAX8 and it is highly competitive with the A320neo.
  • 737-900ER/MAX9 – If we can apportion some of the undefined MAX orders to the MAX9 backlog, based on the current fleet breakdown, we estimate that there might be another 115 to add to the 88 already defined.  This is a soft market for Boeing and the MAX9 does not look competitive with the A321neo.
  • MAX10 – This is a new model and, in the view of many, the better competitor to the A321neo than the MAX9.  There is no previous model to provide a fair comparison.  However, it has slightly more announced customers and more than triple the orders.

Based on the data (and admitting its limits) it appears that Airbus is doing a lot better than Boeing.  Boeing’s reluctance to breakdown MAX models in its own orders does not speak of confidence.  If Airbus can do this, why can’t Boeing?  Both OEMs see customers chop and change the models frequently.

Whereas Boeing and Airbus are nearly equal at the center of the market, Airbus is much stronger on the larger size of the market.  When we apportion undefined MAX orders and gave the MAX8 at least 1,000 more, this was a lowball.  Based on the active fleet, it should be 1,212 of the 1,616.  The outcome of this still shows the MAX8 to be highly competitive with the A320neo.  But it also highlights the weakness in the MAX9 and MAX10 against the A321neo.

It would seem the market has sent a message, especially with the A321neo .  Airbus is winning at the top end and every A321neo sold is a MAX9 or MAX10 order Boeing cannot win back and it is also an NMA order missed.

author avatar
Addison Schonland
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.

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