latest figures we have are to the end of September.)
At current rates of production the large commercial jet backlog
represents over eight years of work-in-hand. Even when already announced rate changes are taken into account, the backlog
still represents just over seven years of work-in-hand.
The order intake shows little sign of slowing.
So far this year there have been orders for over 2,100 new jet aircraft, or 685 more than in the same period last year. The
number of deliveries is also up. There have been 921 deliveries so far this year, or 80 more than in the first nine months
of last year. But the order intake is vastly exceeding the delivery rate. If one looks at what has happened this year, for
every large commercial jet delivered, 2.3 new aircraft have been ordered.
It is hardly surprising
that there has been a long period of new backlog records. The large commercial jet backlog reached yet another new high at
the end of September and the number of single-aisles on firm order also reached another new high. A great deal of the backlog
gain has been driven by demand for single-aisles and especially for those with the new engines. In fact, the single-aisle
backlog has grown by over 1,500 aircraft in the last 12 months and by nearly 2,600 in the past two years. Production rates
have not really increased by very much to meet that demand and, as things stand at present, the current single-aisle backlog
represents some 8.8 years of work-in-hand, even when one takes into account planned production rate increases which, in some
cases, are some way off.
The widebody backlog is a long way from getting back to anywhere near record numbers but the
figure of 2,443 aircraft at the end of September is slightly above the figure 12 months ago and it is up on the figure at
the start of this year, though not by very much. But the current widebody backlog still represents about seven years of work-in-hand.
not to suggest that anyone ordering a new aircraft today might have to wait several years for delivery. For some programs,
near-term production slots are filled and the only available slots are three or four years down the line. Not all airlines
want their new aircraft within the next three or four years anyway and some customers have orders that will only start to
deliver in six or seven years’ time. Then you have the case of minor programs that only enter service in four or five
years’ time. The A350-1000, 737-MAX, C919 and MS-21 only enter revenue service in 2017, at the earliest. The 787-10
has an EIS date of 2018.
What is interesting about programs like the A350-100 and the 787-10 is that despite the fact
they do not enter service for quite some time, their current backlogs will see them in production for a number of years after
EIS even if they don’t get any new orders.
It is not entirely a case of the amount of work-in-hand extending for several years though.
The A330, 747 and 767 have relatively small backlogs and current rates of production suggest that each has about 2.4 years
of work-in-hand. The 777 and the CSeries both have about 3.3 years. Then we get to the A350 and the 787 which have over seven
years of work-in-hand. The A320 Family, which currently accounts for a massive 38% of the entire large commercial jet backlog,
has about 8.3 years of work-in-hand.
The problem that the manufacturers have is mostly with single-aisle production. This year there
will be about 930 single-aisle deliveries. There will also be more orders before the end of the year and more orders next
year and the backlog is likely to rise even higher. Airbus has a single-aisle production rate of 42 per month and Boeing’s
rate (for the 737) is currently 38 per month, rising to 42 per month in the first half of next year. Both manufacturers would
like to see these rates go to around 52 per month. Neither manufacturer could possibly ramp up to that rate right now but
if they did the Airbus single-aisle work-in-hand period would drop to 6.7 years and Boeing’s amount of 737 work-in-hand
would drop to five and a half years. But even these periods might be considered to be far too long.
up production rates is not easy and the increases, per month, are usually quite small. For example, Boeing has just announced
that the 737 rate will go to 47 per month, but only in 2017. It will stay at 42 per month for three years or so. Similarly,
some changes to the 787 rate have also been recently announced. The rate is going from 10 per month later this year to 12
per month by 2016 and then to 14 per month at some point in 2019. It all takes rather a long time.
side to this is that some program rates are slowing, notably those of the very large aircraft. There will be 25 A380 deliveries
this year, down from 30 last year. There will also be fewer 747 deliveries. The projection was for 28 but only about 21 will
be delivered and then the rate will fall again to 18 deliveries a year. Five very large aircraft have been ordered this year,
all 747s, but DAE cancelled five 747-8Fs and, most recently, Lufthansa cancelled three A380s. Bloomberg recently reported
that Air France, which has three A380s on order, might cancel some or all.
The point, however, is
that the problem of production rates is only going to get worse as time goes on. What is looming on the horizon for some programs,
particularly those with long periods of work-in-hand and large existing backlogs, is that customers placing new orders over
the next year or so might not be able to get the deliveries they want in the timescales they want.
long ago the large commercial jet backlog was a lot smaller than it is now and it represented about four years of work. This
was a fairly comfortable arrangement which suited the manufacturers and the customers alike. But things have changed. The
amount of work-in-hand has virtually doubled and the backlog continues to rise though it does have to be said that not all
aircraft programs currently have larger backlogs than 12 months ago. Some have much smaller backlogs.
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