Airbus Forecasts Rebound Won't Occur Until 2023-2025
Aircraft deliveries will be flat this year, Airbus said, forecasting that the recovery in commercial air transport won’t return to 2019 levels until some time between 2023-2025. The airframer reported a $1.3 billion loss last year.
Deliveries in 2020 were down by almost 300 aircraft from 2019, coming in at 566 deliveries for the year. Single-aisle aircraft dominated. Airbus delivered 446 A320-family aircraft and 38 A220s. By contrast, it delivered 19 A330s, 59 A350s, and four A380s. “We are basically seeing a shift away from widebodies,” Chief Financial Officer Dominik Asam told analysts during the company’s earnings call last week.
Production rates for widebodies will hold steady this year. Narrowbody production, by contrast, will increase slightly. Airbus expects to raise production of A320-family jets from the current 40 aircraft per month to 43 in the third quarter and 45 by the end of the year, CEO Guillaume Faury said. A220 production will go from four aircraft per month now to five per month by the end of this quarter. Airbus expects the A220 program to reach breakeven by the middle of this decade.
In 2020, Airbus had 383 gross orders, 360 for narrowbodies and 23 for widebodies. The company had 115 cancellations for the year. “We need to watch this trend going forward,” Faury said of cancellations.
IATA predicts air travel will begin to rebound in the third quarter of this year, but Airbus is more conservative, forecasting a return to 2019 levels by between 2023-2025. Vaccinations will help restore consumer confidence, Faury said, but the emergence of new coronavirus variants could stifle the recovery. Domestic and regional travel will lead the recovery, with longhaul lagging, which tracks with Airbus’ order trends. “The path to recovery is not necessarily linear,” he said. “Therefore, we have to remain humble and demonstrate our resilience again.”
Airbus’ defense, space, and helicopter businesses did better than its commercial aviation business, although the airframer noted that governments have pulled back on some defense spending as economies around the world suffer. Airbus delivered nine A400M airlifters last year.
At the end of last year, Airbus’ backlog stood at 7,184 commercial aircraft, valued at $451 billion, slightly off its 2019 year-end backlog, Faury said.
In Other Fleet News
- De Havilland is pausing production of the Dash 8-400 at its Downsview plant until demand returns, the airframer said. The company delivered 11 Dash 8s last year and will keep the plant open as it works through its backlog, but it expects to close it in the second half of this year. About 500 workers will be affected, the company said.
De Havilland inherited the Downsview plant, near Toronto, when Bombardier divested the Dash 8 program. De Havilland said it is looking for a new site to resume production of the type. In the meantime, it is developing aftermarket modifications for the in-service Dash 8 fleet, including new overhead bins and freighter-conversion support. The airframer said it plans to resume production. “We see a bright future for De Havilland Canada and the Dash 8,” said David Curtis, executive chairman of Longview Aviation Capital, De Havilland’s parent company.
- The UAE became the latest country to clear the Boeing 737 Max for flight last week, when the country’s General Civil Aviation Authority (GCAA) outlined a series of steps operators must take before returning the type to service. Operators must submit their plans on returning the Max to service to the GCAA that must account for differences in the FAA’s and EASA’s safety mandates and to retrain pilots on the new flight systems. Flydubai has more than 200 737 Max aircraft on order and has idled its fleet of about 20 since the type’s worldwide grounding in 2019.
- Air Lease Corp. is leasing two Airbus A320-200s to Uzbekistan’s Qanot Sharq Airlines. The two A320s will be the first aircraft in the start-up’s fleet and are expected to be delivered next month. Qanot Sharq said it plans to start operations from Uzbekistan to Istanbul, Ankara, Dubai, Jeddah, Medina, Moscow, St. Petersburg, and Almaty.
- All good things come to an end. Although it’s not a commercial aircraft, the Learjet has been an aviation legend since Bill Lear flew the first jet in 1963, becoming the last word in jet-set opulence. (Frank Sinatra was among its fans.) Bombardier, which acquired Learjet in the 1990s, said last week that it would end production of the iconic jet this year. The Canadian airframer has divested its commercial aviation division (and its rail transportation division) and now is focusing on its other business jets.
- As expected, the pandemic pushed Delta Air Lines to reset its deliveries over the next few years. The carrier delayed the arrival of its first of 100 Airbus A321neos by two years to 2022. In total, Delta has deferred the deliveries of 102 aircraft from 2020-2022 to 2023 or later. The airline retired 178 planes, including all of its Boeing 737-700s and 777s, and McDonnell Douglas MD-88s and MD-90s, in 2020.