When Airbus and Boeing opted to launch re-engined versions of their A320 and 737 families rather than develop all-new narrowbodies, their logic was that – while the industry was happy with the design, reliability and capacity of their current single-aisle offerings – long-term high oil prices would spur a rush by airlines to replace their aircraft with less-thirsty alternatives. From their viewpoint, upward pressure on Brent Crude was a good thing, in that it forced airlines to invest in more efficient equipment.
Now, with the price of oil continuing to drop, both airframers are dismissing expert warnings that carriers will start to hold on to their gas-guzzlers a bit longer and impact the backlog. Instead, they argue that a low oil price boosts demand for air travel by driving down fares and fuelling the global economy.
Both arguments cannot be right – or can they? It is inevitable that cheaper fuel will eventually impact the replacement market. Why would an airline invest in new aircraft when the savings offered on fuel consumption are marginal? But what if for every delayed replacement there was a need for one or more aircraft to meet capacity growth? This is the dynamic Airbus and Boeing are betting on. And as consumers and businesses – including airlines themselves – feel the benefit of falling oil prices in their pocket, the airframers might be right to be unconcerned.
Source: Flight International
