MAX KINGSLEY-JONES/ COMMERCIAL AVIATION EDITOR
Airbus and Boeing expect a flat 2004 but hope for better 2005
The "airline recovery starts here" is what the major manufacturers hope and believe, to ensure that an uplift in orders in 2004 leads to a boost in output from 2005.
Airbus and Boeing are optimistic that while 2004 will be flat for output, 2005 should start to see rates increase, but this is far from certain.
"With deliveries lagging two-to-three years behind orders, if we don't see an orders recovery in 2004, then we'll have to start questioning whether deliveries will start going up in 2005," says Airbus chief commercial officer John Leahy.
Airbus has just taken Boeing's scalp for the first time in terms of airliner production, delivering around 310 aircraft against its rival's 280, for a total of 590 aircraft. This represents the second consecutive year of decline in large aircraft production, with deliveries falling 14% from the 2002 total of 684 aircraft (381 Boeings and 303 Airbuses).
Leahy expects Airbus's 2004's delivery numbers will be "similar, if not a little bit down" on 2003, as its order intake has been lower than the deliveries for the year.
Boeing expects another flat year in 2004, with 270-290 deliveries. "We feel we've hit bottom, but we don't see a recovery in orders before 2005," says Boeing vice-president marketing Randy Baseler. "Before the SARS outbreak, we expected orders to start coming back in 2004 and output from 2005. That recovery next year now depends on airline revenues improving." He adds that he is encouraged with the way the US market is recovering, and that "yields are coming back".
GE Aircraft Engines president David Calhoun is also cautiously optimistic that the worst is over: "There's no question we are beginning to see a lift, I believe we are in for an upturn. I'm more optimistic than I have been for three years."
At the time of writing, Airbus's and Boeing's gross orders for the year stood at 490, compared to 550 for the whole of 2002. Backlog is expected to decline by around 100 units to a little over 2,500 aircraft.
Airbus gains
Airbus's market share gains in terms of gross orders in recent years has been extraordinary, moving from 20% of the market as recently as 1995 to 55% this year. Leahy predicts that the market will now settle, with Airbus and Boeing trading places in the 40-60% market share band.
Several major milestones should be passed over the next 12 months, probably the most significant of which will be the full launch of the Boeing 7E7 and the roll-out of the first Airbus A380 in Toulouse. With Boeing's board having given authority to offer the new widebody, the manufacturer is now tasked with signing up enough orders to get the programme fully launched during 2004.
One key element of the 7E7 programme, which should be resolved next year, is the selection of the engine suppliers. With all three powerplant players in the running, Boeing is still to decide publicly whether it will go for single or dual source. If the former is chosen, it will be interesting to see if one of the losers hooks up with Airbus to help it develop a competitor.
The A380 roll-out, scheduled for the end of 2004, will precede the historic first flight of the 550-seat giant early the following year. However, Airbus has some key hurdles to negotiate in the intervening period, including the definition of the specification for the initial production aircraft and ensuring that it keeps to its timetable and performance promises.
Boeing is due to deliver its first 777-300ER - equipped with the world's most powerful engine, the General Electric GE90-115B - in April, to launch operator Air France. Work will begin next year on the 777-300ER's ultra-long-range sister, the 777-200LR, which is due to fly in late 2004.
At the smaller end of the market, regional jet deliveries were up very slightly on 2002 to around 320 aircraft (based on Flight International estimates from early December). A decline in output by Embraer was more than offset by an increase at Bombardier. While the Canadian company out-delivered its rival in 2003, roles look like being reversed in 2004, with Embraer increasing output and taking the lead over Bombardier. Overall, 2004 regional jet deliveries look likely to be slightly greater than the preceding 12 months.
The year will see the introduction, after several delays, of the 70-seat Embraer 170 with launch customer US Airways. The year should also see the delivery of the first 175, and the first flight of the larger 190 variant, which has a bigger wing. Production of ERJ-145 family aircraft in China should also gather momentum in 2004.
Low turboprop output
Turboprop production continues to be low, with just ATR and Bombardier remaining in the market. Between them they are expected to deliver fewer than 40 aircraft in 2003. The Q400 had some success recently, which should help Bombardier keep output levels stable next year. ATR suffered a major blow with the collapse of its key customer Khalifa Airways, but received a late boost with a deal from CSA Czech Airlines for seven aircraft. This should help it keep to its aim of delivering 20-25 aircraft in 2004.
The year could be make or break for the Sukhoi-led Russian Regional Jet programme, as it is still to secure firm orders despite being well into its development programme. China's ARJ21 project is at a similar point, but has commitments from several Chinese carriers.
Elsewhere in Russia and Ukraine, further consolidation of the design bureaux and manufacturing plants should help to revive the region's once-great air transport industry, but it is likely to still be hampered by local airlines' lack of funds to order aircraft.
Source: Flight International
