New technology, fuel efficient, narrowbody aircraft continue to be the focus of demand as airlines are encouraged by shareholders, investors, governments and passengers to operate the cleanest aircraft fleet possible, as the world commits to net zero emissions. In 2020, airlines and lessors worked to defer orders while they rationalised their fleets. As confidence in air travel recovery continued to grow throughout the year, airlines became more confident in their capacity plans and 2021 marked a return to aircraft ordering from the OEMs. 

Boeing’s orderbook recovered strongly in 2021, aided by the successful reintroduction of its MAX aircraft to the market. Boeing’s 2021 net orders, after factoring in cancellations and conversions, reached 535 (909 gross orders). Boeing delivered more than 340 aircraft to airlines in 2021, which was more than double the 157 delivered in 2020, but still far below the record of 806 aircraft deliveries in 2018. 

Approximately two thirds of the aircraft sold by Boeing last year were variants of the 737MAX. Boeing booked 263 orders for its 737-family aircraft in 2021, and 77 orders for widebody aircraft: 32 767s, 24 777s, 14 787s and four 747s. 

Boeing’s MAX programme was boosted further in January 2022, with an order from Allegiant Air for 50 737 MAX jets – the 737-7 and 737-8- 200 – with options for 50 additional airplanes. This deal was specifically important since it marks the departure of Allegiant from its current all-Airbus fleet of 108 A319 and A320s. 

Maurice J. Gallagher, Jr., Allegiant chairman and CEO, commented: “While the heart of our strategy continues to centre on previouslyowned aircraft, the infusion of up to 100 direct-from-the-manufacturer 737s will bring numerous benefits for the future – including flexibility for capacity growth and aircraft retirements, significant environmental benefits, and modern configuration and cabin features our customers will appreciate.” 

In 2021, Airbus booked 501 net orders and 771 gross, announcing that it had also reached its delivery target for the year with 611 commercial aircraft delivered to eighty customers. 

“Airlines are no longer willing to take a bet on a huge airplane that can only serve a small subset of a network or a small aircraft that can’t scale in terms of cost per seat or other attributes for a network.

Darren Hulst
Boeing

Chart 19: Aircraft deliveries and firm backlog
Chart 20: Aircraft retirements in 2021
Chart 21: Airline capacity growth
Chart 22: Airline travel growth
Chart 23: Passenger load factor trends

Airbus

“Our commercial aircraft achievements in 2021 reflect the focus and resilience of our Airbus teams, customers, suppliers and stakeholders across the globe who pulled together to deliver remarkable results. The year saw significant orders from airlines worldwide, signalling confidence in the sustainable growth of air travel post- COVID,” said Guillaume Faury, Airbus Chief Executive Officer. 

In 2021, Airbus delivered 483 A320-family aircraft, 55 A350-family aircraft, 50 A220-family aircraft, 18 A330-family aircraft and five A380s. During last year, the airframe manufacturer doubled its gross order intake compared to 2020 with 771 new sales (507 net). The A220 won 64 firm gross new orders and several high profile commitments. The A320neo family won 661 gross new orders. In the widebody segment, Airbus won 46 gross new orders including 30 A330s and 16 A350s of which 11 were for the newly launched A350F, which gained an additional 11 commitments. 

Airbus is particularly proud of its A321 aircraft programme, with demand exceeding even the manufacturer’s expectations: “We see extremely strong demand for our A321 family, more than we anticipated the, while the A220 is gaining a lot of very good traction,” says Paul Meijers, EVP – commercial aircraft leasing, trading & finance at Airbus. 

Freighter orders were a particular feature of 2021 as cargo conversion slots dried up, freighter lessor and operators have been obliged to make direct OEM orders to ensure access to more lift as cargo demand remains high. Boeing sold 80 freighters in 2021 – 19 767-300Fs, 19 767-300Fs, 38 777Fs, and four 747s. 

The A330neo programme

Airbus began its marketing push for its A350F in 2021, with ALC becoming the launch company with an order for seven units. CMA CGM Group signed an MOU for four, while SIA signed a LOI for seven. 

“Unless there is a significant return of international business travel, current technology or more likely new technology narrowbody aircraft will remain in favour, at least in the short term. When it does come back on stream, the climate change focus will also continue to push airlines to operate more fuel efficient widebody aircraft, notes Fitch Ratings’ Johann Juan. 

“We have certainly seen a significant decline in metal values for A330s, particularly the -300ER and -200LR aircraft types that are less in favour in this economic environment, which has been reflected in depressed lease rates and metal values,” he says. 

Airbus believes deeply in the A330neo programme. “A lot of people were questioning the A330neo programme two years ago, but we strongly believe it is going to be do very well. The aircraft is excellent in terms of its performance capabilities, economics, and range, and is also priced at an attractive capital cost versus other widebodies.” 

Widebodies & used aircraft

Meijers acknowledges the demand for mid-life aircraft due to the shortage of new technology aircraft and equally believes that the widebody aircraft demand will return for used aircraft, especially when South East Asia countries recover. 

“When South East Asia recovers and borders reopen, we will see a recovery in the demand for widebodies in general, including used aircraft,” he adds. “Those aircraft provide very good value at attractive lease rents and airlines will probably pick up on these opportunities with leasing companies in the market.” 

When South East Asia recovers and borders reopen, we will see a recovery in the demand for widebodies in general, including used aircraft. Those aircraft provide very good value at attractive lease rents and airlines will probably pick up on these opportunities with leasing companies in the market.

Paul Mijers
Airbus

For Boeing’s Darren Hulst, the key to fleet decisions in this environment is versatility: “The industry wants the capability and efficiency of new technology at the lowest risk,” he says. “Airlines are no longer willing to take a bet on a huge airplane that can only serve a small subset of a network or a small aircraft that can’t scale in terms of cost per seat or other attributes for a network. That’s why over the long term, or even over the next few years, we’re going to see a widebody movement towards the versatility of an aircraft like the 787 that can fly pretty much anywhere with the lowest trip and seat cost.” 

“In the single aisle space, new technology is important and a focus of where our demand is, but there is still that need to balance between the cost per trip and the cost per seat as the industry prepares to compete in a market that features more and more low-cost players,” adds Hulst. 

As the aviation market inches its way out of the downturn, the airframe manufacturers are beginning to look to ramp up production levels to meet demand. 

“While uncertainties remain, we are on track to lift production through 2022 to meet our customers’ requirements,” said Faury in January 2022. 

Meijers confirms that Airbus is increasing production on all aircraft programmes, but with a focus on single aisle types. “We will get back to 65 aircraft per month by summer 2023 on single aisle aircraft, we only paused A220 production, which has now resumed. We did a small adjustment to the widebody production rates – the A330 will increase from two to three a month – and only small upward adjustment on the A350 programme because the market isn’t yet fully recovered.” 

For both manufacturers ramping up productions rates needs to be a staged approach due to the problems experienced by their third-party suppliers. “It is extremely challenging from a logistics perspective - rehiring people, lining up suppliers, for this quick turnaround in the single aisle production.” says Meijer. “The key objective for 2022 is to actively manage this ramp up to serve our customers and meet our contractual commitments. They expect their aircraft on time, and that’s what we’re working towards.”

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