Mega-Trend 2: Narrowbody point-to-point

Everything now points to the rise of narrowbody point-to-point operations.

And ‘cometh the hour, cometh the plane’! It is a truism that aircraft and engine technology advances can transform the industry. New long range widebody aircraft allowed Emirates to create one-stop-to-anywhere operation; efficient narrowbody Airbus and Boeing aircraft aided the spread of LCCs across the world (in each case two other ingredients were also needed: visionary entrepreneurs and liberalised market access).

Now, just as intensified environmental pressures demand lower unit emissions, along come the step-change efficiencies of aircraft like the A220, the A320neo series and Boeing’s MAX models. They not only are up to 30% more fuel efficient, they have expanding range characteristics, easily handling five hour journeys and up to eight; and then they are smaller than widebodies, so are much more versatile in the city pairs they can serve.

This flexibility is appropriate to their time in another way. As travel uncertainty persists, leisure passengers will both tend to stay reasonably close to home and to prefer non-stop operations. These services, mostly by LCCs, offer low prices – often cheaper than the obligatory costs of COVID testing.

Most data point to a rapidly diminishing proportion of widebody aircraft in the world fleet. Currently, narrowbodies in service outnumber widebodies three-to-one. By the end of this decade, that ratio will rise to at least four-to-one, based on current order books. Airbus’ most recent forecast predicts “shifting demand from fleet growth to accelerated retirement of older, less fuel-efficient aircraft”, so the proportions could shift even faster (also perhaps implying a slower rate of overall growth).

Another powerful ingredient in the transition towards single aisle models, as noted earlier, will be the leasing companies’ preference for easily interchangeable assets - a feature that suggests a virtuous cycle.

Moderator: JLS Consulting, Director, John Strickland

  • airBaltic, Chairman of the Board & CEO, Martin Gauss
  • Embraer Commercial Aviation, CCO, Martyn Holmes
  • Play, CEO, Birgir Jónsson
  • SunExpress, CEO, Max Kownatzki

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