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The Industry today
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Only three aircraft were ordered in February, but 506 single-aisle engines were ordered.
(The latest figures we have are to the end of February 2016.)

It has been a slow start to the year; fewer aircraft orders than in the first two months of each of the last three years. There have also been fewer aircraft deliveries. However, for the engine manufacturers it has been a pretty good start with more engines ordered in the first two months of the year than in the same period in each of the last three years.

This industry has had slow starts before and has then gone on to have record years, certainly in terms of production. There have also been slow starts in terms of the aircraft order intake. Only three single-aisles were ordered in February, taking the total gross order intake in the first two months to 86 aircraft. The net figure is 79. That is a slow start. Gross orders in the first two months of the year have been slowly diminishing, from 362 in Jan-Feb 2013 to 249 the following year and then 114 last year. But what might be a surprise for the industry is the fact that this is the lowest monthly order intake since May 2003. One could be forgiven for thinking that perhaps a new downturn has started, or started last year. The order intake in 2015 was the lowest since 2010. In 2009 a total of 623 large commercial jets were ordered and that was considered to be a pretty bad year. If just 86 aircraft are ordered every two months for the rest of this year, 2016 will be worse.

One consequence of the low February aircraft order intake was that the backlog went down, not just down a little bit but down 99 aircraft. This, as it turns out, is the largest backlog drop in a single month for five years. To be fair though this is not the sort of backlog drop that will set alarm bells ringing. There was a new backlog record at the end of January and the February figure is the third largest ever, behind the January and the December 2015 figures. But Airbus and Boeing both finished the month with a smaller single-aisle and a smaller widebody backlog. That does not happen very often.

Airbus currently has 57 fewer aircraft on backlog than at the start of this year. Boeing has 37 fewer. There is not a single major aircraft program that had a larger backlog at the end of February than at the start of the year. In fact, with the exception of the A318 which has no backlog anyway, ever single major aircraft program had a smaller backlog at the end of February than at the start of this year. A few minor aircraft programs however do have slightly larger backlogs; the 737 MAX backlog is up one; the 787-9 is up four, the A321neo is up 13 though the A320neo is down 14; the A330-900 and the 737-700 backlogs are both up 14 and the 737-800A backlog is up 17 aircraft.

So, February saw a very low aircraft order intake and the backlog dropped accordingly. To make matters worse, aircraft deliveries in both January and February were lower than in the same months last year. By the end of February there had been 131 single-aisle aircraft deliveries, 14 less than in the same period last year and six less than in Jan-Feb 2014.

There were also 42 widebody aircraft deliveries, eight fewer than in the same period last year. Airbus has so far delivered 14 fewer aircraft than by the end of February last year and Boeing has delivered eight fewer. But both companies have delivered fewer single-aisles and fewer widebodies than at the same time last year.

February was not all bad news for the industry though. It was an interesting month for the engine companies with orders for 506 engines. The fact that only single-aisle aircraft engines were ordered in February and no widebody engines is neither here nor there. Six engines were ordered for the three single-aisle aircraft ordered during the month, and another 500 single-aisle aircraft engines were ordered for previously ordered aircraft. As a direct result, there are currently 422 more single-aisle engines on firm order than at the start of this year and the current firm order book of 22,110 engines is a new record for the industry. The number of widebody aircraft engines on firm order dropped in February but there were gains in January and the current widebody aircraft engine order book of 5,048 engines is 22 more than at the start of this year.

One advantage that the engine manufacturers have is that there are over 2,350 single-aisle and widebody aircraft on firm order without engine selections. The 500 engines ordered in February for some of these aircraft is probably one of the largest conversions of To Be Decided engines to firm order that there has ever been.

The engine manufacturers, in particular CFM International and Pratt & Whitney, have been slowly taking engine orders for previously ordered aircraft. CFM and P&W will share the engine orders for the 2,127 single-aisle aircraft on firm backlog order but without an engine selection at the end of February. These, of course, are all A320ceo and A320neo Family aircraft. The other engine companies will share the engine orders for the 225 widebody aircraft which still do not have an engine selection. There is a broad mix here; 155 787s, 40 A330s and 30 A380s.

There is now some urgency to place engine orders. In January there was the first A320neo delivery with PW1100G engines. First deliveries of the LEAP-1A for the A320neo Family are not far off and the first 737 MAX will be delivered next year. The urgency mostly involves engines for single-aisle aircraft.

It is quite possible that this year we will see fewer aircraft orders than last year, but perhaps a similar number of engine orders.

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Philip Abbott,
Editor & Publisher.