OEMs on the path to recovery as aircraft production and ordering rebuild
2022 has evolved into a better year for the major commercial aircraft manufacturers.
Orders and deliveries at Airbus and Boeing have rebuilt to something approaching normal levels, after the OEMs suffered through the drop-off in ordering, the backlog erosion and production curtailment that were experienced through 2020 and 2021.
Airbus is now in a position where it is close to returning to pre-pandemic levels of activity, with production building steadily - if not as rapidly as hoped - and ordering returning to the levels that were normal in the years immediately preceding the onset of COVID-19.
Boeing has more ground to make up, in no small part due to a number of issues of its own making and unrelated to the pandemic. However, the US manufacturer is now stabilising its operations and is charting out a route back towards normality.
Summary:
- Narrowbody output growing rapidly, but supply chains still not completely healthy.
- Airbus to fall short of its 700 aircraft target in 2022, but committed to long term production plans.
- Boeing makes further cuts to its full-year delivery target.
- Ordering on the right path - with more deals closed in early Dec-2022.
Narrowbody output growing rapidly, but supply chains still not completely healthy
Over the first 11 months of 2022 Airbus and Boeing delivered a combined 878 aircraft - Boeing with 409 and Airbus with 566.
Airbus' annual total has shrunk to 564 - as two A350s nominally transferred to Aeroflot Russian Airlines in Dec-2021 were subsequently 'undelivered' due to the sanctions imposed on Russia in 2022.
Narrowbody deliveries over the period, which was a 93% share of overall deliveries, totalled 818 aircraft.
This is well above historical norms, with narrowbodies typically accounting for about 77%-80% of deliveries in a given year.
Airbus and Boeing narrowbody and widebody aircraft deliveries: Jan-2016 to Nov-2011
Source: CAPA - Centre for Aviation, via data from Airbus and Boeing.
However, pandemic-era travel recovery patterns have favoured the production of smaller aircraft - domestic and short haul international were among the earliest markets to recover, whereas long haul transcontinental travel has been among the slowest to recover.
Widebody output has also suffered from the fallout from geopolitical issues, production problems and several high-profile customer disputes, complicating deliveries.
Airbus to fall short of 700 aircraft target in 2022, but committed to long term production plans
Airbus delivered 68 aircraft in Nov-2022 and announced in early Dec-2022 that it did not expect to meet its 2022 full-year delivery target of "around 700" aircraft.
However, the OEM also stated that its final delivery total for the year is "not expected to fall materially short" of the 700 aircraft.
In a normal year, Airbus is more than capable of delivering above 100 aircraft during December.
However, the OEM is facing a "complex operating environment" and still grappling with supply chain and workforce issues - some a hangover from the pandemic, and others a result of efforts to rebuild output - that are slowing delivery rates.
Airbus deliveries for the final two months of the year: 2016-2021
|
Year |
November deliveries |
December deliveries |
Two-month total |
|
2016 |
61 |
111 |
172 |
|
2017 |
74 |
127 |
201 |
|
2018 |
89 |
127 |
216 |
|
2019 |
78 |
138 |
216 |
|
2020 |
64 |
89 |
153 |
|
2021 |
58 |
93 |
151 |
Airbus also announced that it would adjust the speed of the ramp-up of A320 production over 2023 and 2024. The company has ramped A320 family production from 40 to 45 aircraft per month since 3Q2021, and had been targeting reaching a rate of 65 by early 2024.
Challenges in the supply chain have meant that Airbus had already pushed this target back once (from mid-2023).
At the same time, A220 build rates at the Mirabel and Mobile assembly lines have grown from five to six per month over 2022, although actual delivery numbers have not been commensurate with this increase.
Due to the A220s long supply chain - which includes significant work outsourced to China and parts of Europe - a number of aircraft remain unfinished and waiting on supplier deliveries. Because of this situation, deliveries and line production rates are not expect to match up until well into 2023.
Airbus remains committed to raising A220 output to 14 per month by 2025.
At the same time, the OEM is targeting a 20% reduction in supplier costs on the aircraft and reaching operational break-even on the programme.
A350 deliveries have totalled 50 aircraft, mostly for the smaller A350-900. Airbus is producing on average five A350s per month, and the planned increase to six per month is now unlikely until 2023, or even beyond that.
A330 production remains at just two per month, with only 28 delivered to the end of Nov-2022. Production is mostly focused on the A330-900, with 17 delivered so far. The A330-900 makes up the vast majority of the A330 backlog.
Airbus has outstanding orders for 189 A330neos (five A330-800s and 184 A330-900s) and 21 A330ceos (13 A330-200s and eight A330-300s). Some of the A330ceo orders are unlikely to be filled.
Airbus somewhat unexpectedly announced plans to increase A330 output to three per month by the end of 2022, bolstered by expectations of a pick-up in ordering for the type.
Boeing makes further cuts to its full-year delivery target
During its late Oct-2022 financial results announcements Boeing trimmed its full-year delivery outlook (the second such reduction this year).
This was mostly due to the company dealing with supply chain issues in the 737 MAX programme.
CFM International is the sole engine supplier for the narrowbody family, and slower than hoped for output of the LEAP-1B engine has forced Boeing to adapt.
Earlier in 2022 Boeing decided to take engines from grounded MAX airplanes - of which there are at least 150 remaining - and then installed them on new-build aircraft in a bid to get new-build aircraft to customers, and to avoid producing engineless 'gliders'.
Boeing had initially been looking to deliver more than 500 of its 737 MAX aircraft in 2022, but had lowered this to the "low 400s".
This has now been cut again, to "around" 375 aircraft, which means Boeing hopes to deliver approximately 50 737 MAX aircraft in Dec-2022.
The US aircraft maker has also announced that 737 MAX production will be maintained at a rate of 31 per month, and will stay there until the company is satisfied that the supply chain can handle a ramp-up.
The OEM had been contemplating output of 38 per month by the end of 1H2023 - but the engine situation made that untenable.
As a result, the OEM has also has dropped its outlook for 737 MAX deliveries for 2022 from a little under 400 to around 375 (including deliveries of aircraft produced during the 737 MAX grounding).
Boeing 737 MAX deliveries, Jan-2018 to Oct-2022
Boeing is making progress on widebodies, with 12 going to customers in Nov-2022.
Key to the increase in output is the resumption of 787 shipments to airlines, which occurred in early Aug-2022 after a delay of 15 months. Six went to customers in Nov-2022.
During the grounding Boeing lowered production but continued to build 787s at a rate of at least two per month, leaving it with a pool of around 120 aircraft awaiting delivery.
While Boeing runs down this backlog, the OEM reportedly intends to maintain 787 production at around 2 per month.
Beyond this, Boeing is considering its options to return production to at least five aircraft per month.
Boeing 787 deliveries, Jan-2019 to Nov-2022
Apart from the Boeing 787, the freight market has been a key market for Boeing.
Of the 63 widebodies supplied to customers in the first 11 months of 2022, 39 of them have been for dedicated freighters (five 747-8Fs, 16 767-300Fs and 18 777Fs).
Boeing has also confirmed that the final 747 - a 747-8F for Atlas Air - will be delivered in early 2023.
The delivery will be the 1574th for the programme, putting an end to a production run at the Everett, Washington, facility that has covered more than 54 years.
Ordering on the right path - with more deals closed in early December
Airbus has announced 1062 new orders (gross) in 2022.
Nov-2022 ordering was subdued, with just 29 new orders from six customers.
For 2022 to date, Airbus has suffered 237 order cancellations, pulling its net total for the first 11 months of the year to 825 aircraft.
Boeing's ordering has been solid, although the OEM didn't have as much success at the 2022 Farnborough International Air Show during Jul-2022.
Boeing has logged 685 gross orders for the year to date.
This total will shoot up in Dec-2022, with the company announcing a huge order from United Airlines for 200 aircraft (100 new 787s and 100 737 MAX aircraft, including exercising 44 purchase options and new orders for 56 more).
Airbus and Boeing gross orders for Jan-2022 to Nov-2022
Even with the recent cuts to delivery targets, the major OEMs are set to deliver more than 1000 aircraft to airlines in 2022, which is an increase of at least 25% over 2021.
Orders are set to end the year close to 2000 aircraft - which would be the best year for new orders since 2016.