Insight – A Review of the Single-Aisle MoM Market

A reader might think we go on about this subject - but we have another data point to share that only how important this market is. And, in fact, it's becoming ever more important. Yes, we know what you're thinking - we agree, that Boeing is missing in action here. This is a big, growing problem and why the MAX10 has so much riding on its certification. Here is our Review of the Single-Aisle MoM Market Let's look at the data. What we are working with here is orders and deliveries from both companies. Between them, Airbus and Boeing account for ~95% of global airline deliveries. The other OEMs are interesting, but these two are the market. We have four charts to illustrate our point. Chart 1 - The Single Aisle Market This is the heart of commercial aviation. Essentially the A320 and 737 families account for most transactions. This chart lists single-aisle deliveries since 2000. That is a lot of aircraft going into the market. The 2022 number is through August. By year-end, 2022 could exceed 2021 if Boeing meets its MAX delivery goals. It is here that we will see the recovery from the pandemic - airlines are chasing new models because of fuel costs and ESG goals. Chart 2 - Single-Aisle MoM Deliveries Boeing created this market with its 757. As we have stated several times, that was a superb decision and the longevity of the 757 is testimony to that. It's been close to 20 years since the last 757 was delivered. Yet, here we are, still trying to figure out a full replacement. Boeing has tweaked and grown the 737 in an attempt to meet that high standard. This has not yet et the goal. Airbus has tweaked its A321 and looks closer to achieving the goal. Closer but 100%. The next chart lists the aircraft that meet single-aisle MoM characteristics. These include the 757 (200 & 300), 737-900, MAX9, and the various A321s. The market growth is less consistent than overall single-aisles. But since 2011 there has been good growth, with a robust pandemic recovery in 2021. Clearly, the market is telling us something about this segment. As these aircraft started to offer more range and better fuel efficiencies, they have become more popular. As route development tools it is hard to beat single-aisle MoM economics. Moreover, the period coincided with air travel exploding and markets opening. Chart 3 -Single-Aisle MoM Delivery Share When we combine single-aisle deliveries and show the relative number of MoM deliveries, the first thought is, that maybe Boeing was right. The single-aisle MoM market is not that big after all. Focusing on the MAX8 and MAX9 appears "sufficient" as the heart of the market looks like it is smaller than the MoM. Not having additional R&D costs at Boeing as it went through the 787 and then 777X (plus KC-46) were better uses of capital? Chart 4 - Market Share Chart 3 is interesting but hides the MoM impact. In chart 4 the reality becomes more evident. If we look at the share of single-aisle MoM deliveries it is clear that the MoM segment is growing strongly. From 13% market share in 2000 to 32% in 2022 YTD. We are publishing this story as Wizz Air exercised an option and ordered another 75 A321neos. That line is likely to swing up by year's end because Wizz Air won't be the last one this year. Boeing won some good MAX10 orders at Farnborough, and more might be expected by year's end. Conclusion The MAX10 is Boeing's attempt to catch the A321. Will it? We're not sure. But it does reflect that Boeing sees the same trends. Boeing has to offer an alternative to the A321. In truth, the MAX10 may not match the performance the various A321 variants do. This means that as the A321LR and A321XLR win more orders, Boeing may have to "do something. We expect more orders for these two A321 variants as they offer the same thing that Boeing touts for the 787 - a market maker, and a route development tool. While the 787, with its range, can do this on a global basis - Auckland-New York for example. But there are far more routes that can exploit the A321LR and XLR. Secondary cities in Europe to all sorts of North American cities as a start. Asia has hundreds of markets like this. With an A321LR/XLR an operator can fly from its hub strong point to a secondary city where natural competitors don't have hubs. For example, London-Baltimore or Paris-St. Louis. With about 200 seats to sell, the economic risks are manageable. AirTransat has already started doing this across the Atlantic connecting markets like Montreal-Toulouse. Are secondary cities worth the attention? Absolutely! Who would have thought Manchester-Dubai was worthy of an A380 a decade ago? But Emirates has shown that it develops new markets with a 777-300ER, as traffic grows service moves to daily double 777s. Then they drop in an A380 and essentially own the market. How Boeing moves forward from the MAX10 will be the thing to watch.

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