Supply constraints mean airlines have to wait for new planes to arrive

According to Airbus, the world’s largest plane maker, airlines ordering the popular single-aisle jet have to wait two years for delivery as supply constraints continue.

Christian Scherer, commercial director for the European aerospace group, said demand from airlines for the company’s A320 family of jets is so strong that “overall” delivery slots are available. For larger orders currently around 2024-25.

“I wish I had more planes for sale. There is a supply constraint on the most desirable properties available. . . on the only aisle, this goes towards the A320 and A321 and now the A220,” he told the Financial Times.

Scherer said that despite concerns about the spread of the new Omicron variant of the coronavirus, demand is essentially driven by demand for more fuel-efficient aircraft. Last week, Airbus secured two important orders, including an agreement with Air France-KLM for 100 A320neo and A321neos. The first deliveries are expected in the second half of 2023.

“In general, the aviation community at large has realized that when people can travel, they will travel, and they will do so for revenge. . . The Covid crisis has fueled the perception that the transition into many other areas. . . Scherer says fuel-saving technology is inevitable.

Only 13% of the global commercial fleet is of the latest generation, he added.

Last year, all airlines stopped ordering planes and in many cases tried to delay or even cancel deliveries at the height of the pandemic. But with many carriers, including Australia’s Qantas, now looking to renew their fleets, pressure has built up in the aerospace supply chain.

Production demand for Boeing 737 Max adding to the tension. The American manufacturer has outsold Airbus this year for the first time since production of the plane resumed in May 2020 after the 2019 engine. Boeing has had 692 orders for the Max this year. , as of the end of November.

During the same period, Airbus secured 540 orders for rivals A321neo and A320neo.

The European group is continuing to maintain its title as the world’s largest aircraft manufacturer at the end of the year. It has delivered 518 planes by the end of November. Boeing has delivered 302.

Airbus insists that demand for its single aisle aircraft is strong enough to justify a sharp increase in production above pre-pandemic levels. Airbus plans to increase production of its A320 family to 65 planes a month by 2023. It is looking at a peak price of 75 planes a month in 2025. It has already hit a record 60 planes a month. months in 2019 before dropping to 40 planes a month last year when the Shot was vivid.

However, aircraft lessors and engine manufacturers have expressed concern about aggressive targets, concerned that too many new jets would push existing ones faster into retirement, reducing their profits.

Ihssane Mounir, Boeing’s senior vice president of commercial business, offered a more cautious note on the demand outlook, telling the Financial Times that “you have to set production targets that the market will need and work towards what the supply chain can support”.

“You have to monitor the supply chain very carefully. Customers want reliability and quality as well as predictability,” says Mounir.

Despite the pressures in the supply chain, Scherer insists “there doesn’t seem to be a systemic obstacle that can stop us from growing”.

It will take time to restore supply chain capacity, said Sash Tusa, an analyst at Agency Partners. He added that even the major suppliers will want “some form of commitment from Airbus (cash, price or guaranteed underwriting) before they invest to raise prices, more certainly. 60 A320neos a month: that’s a real setback for the industry.”