Are Commercial Aircraft Production Plans Still Too High?
There's a lot of talk these days about when the commercial aircraft industry will recover from the COVID nineteen crisis and return to normal and normal is almost universally defined as the your twenty nineteen. But, what if Airbus and Boeing were already at peak production and twenty nineteen with little room for growth over the coming decade? Scary. As that thought may be a look at the numbers suggests it's possible and that in turn raises questions about whether the two airframes have reduced production enough to whether the OVID. Nineteen. Storm. Joining me from Frankfurt to make sense of all this is Jens to aviation weeks executive editor for Commercial Aviation and here with me in Washington is Michael. Bruno Aviation Week, senior business editor who closely watching production rates and the aviation supply chain. Jens. Let's start with you. You wrote column in the August thirty first edition of Aviation Week and space technology that I don't think Airbus or Boeing are going to be too happy about would you say? Probably not well, what I did is I looked at a Abbas global market forecast, which is the forecast for the next twenty years, and by the way, the Boeing fingers are pretty similar. So but for practical purposes, let's just stick with the the Abbas version. and. Looked at production racing compared to to figures. So the to the. Market forecast Abbas puts out is for thirty nine, thousand Costa over the next twenty years. Divide that by twenty, you come up with an average annual production. Off Nine, thousand, nine, hundred, and seventeen aircraft to seventy aircraft to be precise. That's across the entire industry. So that's Abbas Boeing all the other manufacturers. Now I compared this with the. Actual production. Rates. For Two thousand, nine, nineteen, and the plans. For a front nineteen on the buying side because remember Max wasn't delivered. So there's a big difference between what they planted what they actually did. So the plans for Amazon Boeing were. Already over eighteen hundred at Croft. For Twenty nineteen so they were very very close to the. Longtime over two decades. Average rate that Abbas claims is the size of the overall mark. In this case, we ignore all the others there's going to be aircraft delivered by Komax, there's going to be. Did it by a C. by Embraer who knows maybe someone someone else will come in that we don't know yet on the electric hybrid hybrid electric front, maybe some some new comer there's also. No more room for for growth by both Abbas and and. If you remember. Absent. TIKOLO was pushing it suppliers very, very hot higher. They were talking about rights beyond seventy not an I wasn't in any twenty thirties seventy aircraft for Mancha I should say and I wasn't an in the twenty thirties that was in the next few years. So my point is. They were already producing too many aircraft before covert. Based on their own assessment of the market. And now with covert, of course, it's a whole different story. and. My conclusion is that. They haven't made deep enough cuts so far and more will follow. You and you're right when we started twenty nineteen everyone was talking about how fast can the supply chain ramp up How quickly can Airbus and Boeing increase production? I? Guess what you're saying is everybody was wrong. Yeah everything the the the industry went too far. In its. Appetite for growth and its vision for you. Look back we were coming out of the industry was coming out of the global financial crisis in eight eight or nine, which was a big crisis at that standards back. Then by the Senate's back then and then we have had this decade of unprecedented growth. We were industry got used to growth rates, well in excess of global GDP, of course, that's used that. Twice of global GDP, I should say. which is typically the level of growth that's aviation has seen over the past decades. Looking back is clear to me that. This could not be sustained for that much longer. Now the crisis we were seeing now is you know probably more dramatic than anyone could have expected but. On the other hand. That's gross could not have continued. At the same pace was clear.