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The Air Transport Newsletter is a monthly electronic publication based on the analysis of a number of indicators and an editorial, aimed at providing an executive summary about the situation and perspectives of air transport in Spain
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April 2015

Airbus catalogue
By Oscar Alvarez Robles, Editor
Market Value 


Evolution of market value for selected airlines during previous 12 months. European Network Carriers: Air France-KLM, Lufthansa, IAG. European Low Cost Carriers: Ryanair, Easyjet. North American Carriers: American Airlines, Delta Airlines, United Airlines, Southwest Airlines. Asia-Paicfic Carriers: Singapore Airlines, Cathay Pacific, Qantas

Air Fuel Price 


Evolution of air fuel price during previous 12 months

European Airports 


Rolling total (previous 12 months) of passenger traffic in the 5 busiest European airports plus Barcelona

The year 2014 has closed with all time record numbers for the aeronautical manufacturers of commercial aircraft of more than 100 seats: forth successive record of deliveries and second successive record in orders. Airbus and Boeing have between them delivered 1,352 aircraft, confirmed 2,888 net orders, and have a combined backlog of 12,175 planes, equivalent to 9 years of production.

Boeing has been the winner in deliveries with a 100-unit advantage, while Airbus finished ahead in terms of orders, albeit with a more modest advantage. And while Airbus has the lead in the narrow body segment, Boeing is clearly ahead in terms of economic value, given its competitive edge in the wide-body segment.

With the initial difficulties with the B787 largely behind them, Boeing is now focusing on increasing production rates of its thriving mid-sized wide-body to tackle a gargantuan 800-unit backlog. In parallel, the company has recently launched the latest versions of its hugely successful B777 (-X8 and –X9), which have amassed almost 300 orders in less than 18 months.

Meanwhile, Toulouse has been trying to tackle practically the whole wide-body range with one single model: the A350. Being a design optimized for the larger end of the segment, the smaller sibling (the A350-800) had to be cancelled due to lack of interest in the market. And while the largest version (the A350-1000) was aimed at cornering the market in the 300-350 seat segment, it may well become relegated too by the latest Boeing 777 versions. Even the giant A380 has never been but a niche model: after 8 years and 150 units in service it is barely starting to break even at production level, and rumours exist about its potential cancellation.

And yet not all has been bad news for Airbus. Last January the A350 entered revenue service successfully. Some commercial decisions in 2014 have been brave and welcomed by the market, such as the launch of the A330neo, which fills a key gap in Airbus wide body range. A new corporate structure that overcomes the traditional Franco German split leadership has been implemented, normalising the company and putting shareholders and investors in the driving seat ahead of political leaders. 2014 has also been an excellent year in economic terms, with a 6% growth in turnover and a 4 billion Euro result.

Both aeronautical manufacturers are accomplished masters at enlarging planes. This tends to please airlines, generally more worried about unit costs than overcapacity. Both Seattle and Toulouse have thus kept a close eye on the (ever growing) size and range needs of the big three airlines in the Gulf. But in the process they have often disregarded the small-medium sized long-haul market (200 to 250 seats).

In the lower end of this segment there seems to be a raising interest in the market for a replacement of the Boeing 757, whose production finished a decade ago. Answering this demand Airbus has just launched the A321LR with a 7,000 km range. While the market size for this plane may not be too big, Airbus could very well use this model as a base to square up its bet. Indeed, a slightly enlarged version with a bit more range (say 200 passengers in two classes and 8,000 km range) would be a relatively straightforward and feasible exercise for Airbus. Such an aircraft could well complete the bottom end of Airbus long haul catalogue, adding certain operational virtues so far unexplored.

Some may think that a long haul narrow body might be a commercially risky proposal. But it is also true that such a flexible aircraft could open up a considerable number of medium sized city pairs across a liberalized north Atlantic market, not to mention overcoming the traditional strong segmentation of fleets between short and long haul routes. With such ingredients, it may well be the definite tool to finally convince low cost airlines to cross the Atlantic.

13th April 2015

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