It is an absurdly great time to be selling widebody airliners. One look at the order backlogs of Airbus and Boeing confirms this point, but also consider this: there is a premier customer with ample access to financing – Ryanair’s Michael O’Leary – who claims he is unable to place an order for up to 50 widebodies within the next five years because other airlines and lessors have taken all the available production slots.
That is the definition of a supply and demand curve which is tilted way off balance.
O’Leary has made no secret of his ambition to launch an independent carrier providing low-cost, long-haul services between Europe and the USA. But he blames an ongoing capacity war waged between Gulf carriers and European network airlines for crowding out the supply of widebodies to other parties.
In many ways, the Airbus-Boeing duopoly has served airlines well, providing a relatively stable source for well-built, high-performance aircraft. There is a downside though, when production capacity is swamped by a prolonged period of heated demand.
The companies have taken steps to address a shortage of narrowbody capacity, but a widebody shortage is only getting worse. And even if they wanted to accelerate production, suppliers of unique features such as premium cabin seats may not be able to keep up.
That means O’Leary can do nothing but wait.
(This first appeared as a Comment in the 16 September issue of Flight International)
Source: Flight International
