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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 10:46 pm

morrisond wrote:
lightsaber wrote:
While the side discussion is facinating, please tie into the current production rates. Are the aircraft makers playing chicken or should they go back to full production?

morrisond wrote:
Here is a good sample of some the Capacity that has been permanently removed this year.

https://www.flightglobal.com/fleets/whi ... 68.article

Please post a summary as flightglobal blocks non-members.

FWIW, you being more pessimistic than I is scary. I believe we both see a recovery, it is the intermittent years that will be tough.

Lightsaber


I was more pessimistic than you I think back in the start of this and put the 787 at 5 - close enough to the current 6 and the A350 at 3, A330 at 2 - currently at 5 and 2.

It's actually quite easy to become a Flight Global member - no Money required. They don't really have a table either in that article that is easy to copy.

I don't think they should go back to full production however it may not be that long before they increase production again at least on 787/330 that is where I can see Airlines adding capacity.

Here is not a bad source for World Airline Fleets as of 2018/2019. I'll go through and take a very rough guess on what won't be returning.

https://en.wikipedia.org/wiki/List_of_jet_airliners

Airbus 340 was 159 - might be 20-30 in Private/governmental use - Assume 300 Seats x130 Commercial use frames - 40,000 Seats - now 0.
Airbus 330 was 1,265 - about 500 are pre 2005 - probably not coming back - 270 seats x 1,265 = 341,550 Seats - now 206,550
Airbus A380 was 250 - Lets be optimistic and call it 100 coming back. 250 X 500 Seats = 125,000 - now 50,000 Seats

Boeing 747 was 462 - No Passenger Models coming back other than the 748's - call it a loss of 430 x400 Seats = 172,000 now 30ish? X 400 = 12,000 - that seems like a lot of 747 Passenger models still flying then but the list says no freighters

Boeing 767 was 742 x 240 Seats = 178,080 seats - now what 200? = 48,000 seats

Boeing 777 was 1,416 x 350 Seats = 495,600 - take out the 687 produced pre -2008 leaves you with 255,150.

Very - Very rough totals.

Pre-Covid about 1,352,150 seats available on Widebody Aircraft. Now about 571,700 - a reduction of about 58%.

Then of course you have the 350 and 787 fleets which are about 300,000 seats - so call it reduction of about 47% in Widebody seats.

Thats a lot and of course very - very rough. Demand for new frames should return sooner rather than later once demand exceeds 50% of the old number.

First, thank you for the numbers. I agree that with so many out of service, that a small increase in demand will start having planes return to service.
The 2005 cutoff for the A330 is good, but some went through maintenance checks, but we'll see another 100,000+ seats return.
I'll use Airfleets and sets of 250 for the 787 and 300 for the A350. 958 in service of 996 built. I would expect a return, perhaps subtract the first 26 built due to being way overweight.
A350 379 in service of 396 built. One would expect a return.
https://www.airfleets.net/exploit/exploitation.htm

So using my slightly different numbers, I have a start of 1,721,980 seats.
I assume not all are in service If I use all A350 in service (per airfleets) and say the following. However, I agree, about half the seats are in service. The difference is how many will return. I agree some old aircraft will retired quickly.
I calculate just over 850,000 seats in service, but we will see more return, if only temporarily. e.g., EY, QR, KE/OZ, BA, and LH A380s will temporarily push us over a hundred A380s (I assume 100 EK A380s return to service).
I assume
767: 400 return (temporarily) to passenger duty (hundreds scrapped or made into freighters)
A340: 20 return (who and where, I don't know, but we'll have a thread on it here on a.net, if nothing else, HiFly)
A330: 965 return. I'm just not as pessimistic as you with the limit of validity extension to 60,000 cycles and 180,000 FH, it is super cheap if widebodies are needed to get these back in service. The A330 no longer has the short life it had with a 36,000 FC limit of validity, these planes can keep on going.
787: I expect 976 to return to service (perhaps the teens for a bit, perhaps not)
777: An arbitrary age doesn't mean much on an aircraft with 60,000 FC and 160,000 FH limit of validity. None are close. Oh, most Pratt ones will get scrapped. :cry2:, but not all. I'm guessing 800 return to service just based on past recessions.
747: Yea, toast but for the 748 pretty much.

So I calculate they will quickly and cheaply return to about 63% of prior seating quickly.
The issue of production. New 787s will trend larger (787-10), so I will use 275 seats for going forward production and 325 for the a350 (because the A35K should be a higher fraction of new sales).
So assuming they match each other (60 787s per year, 60 A350s per year) plus 24 A330s at 270 seats each, plus I'm adding 18 777s, but upping to 400 seats for the 779.

That means the "idle" production rate is about 3% per year of 2019 widebody seat capacity. So until we are above 2/3rds above prior demand, it is a tough market.

Add to this some fraction of the prior widebody market will be on narrowbodies. Indigo, JetBlue, AirBaltic, VietJet, and CebuPacific are unlikely to miss out an any opportunity their new longer range narrowbodies provide them.

At this time, I do not see any narrowbody production required until 2023 (this time start of 2023 to replace scrapped MD-80/90 and other older narrowbodies) . I personally think the A319 is doomed. (Airfleets has 1166 still in service). However, we have A320NEO+MAX+A220 production back filling last year and this year and a planned production ramp by both Airbus and Boeing.

The question is predicting what fraction of longhaul demand goes to narrowbody. If traffic is 80% of 2019 at YE 2023 as I estimate (predicted might be a better word), then the widebody capacity will only be 72% of 2019, or short if demand by 8%. Taking the most agressive widebody ramp I can envision (787 to 100/yr as well as A350 100/yr, 777 back to 50/yr, A330 I arbitrarily kept at 24, but I'm not looking for predicting which did what, but rather how many seats), I see 5% could be added per year.

But so many widebodies could return to service if fares justified:

So this is a what if scenario.
A340s, perhaps another 20 to 50 can return.
A330s, I think another 200 (at most) could return
A380: At most another 50, but I would be inclined to max out at 170 return to service
777s, another 200 to 300 could return to service

That is another 14% more of 2019 capacity that could return to service or to 80% of capacity before the 787/A350 production.
Sadly,
With 3% being added just at near idle widebody capacity that either must go up or two lines must shut down...
I see as much as 6% more than is needed in 2023 being available than is needed. :(
That means 2024 demand can be met.
Which means 2025 is the earliest I see in a widebody production recovery. :cry2:

It is good to talk numbers and what fraction of the parked could be assumed not to return.

Lightsaber
3 months without TV. The best decision of my life.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Sun Jan 03, 2021 2:53 am

lightsaber wrote:
morrisond wrote:
lightsaber wrote:
While the side discussion is facinating, please tie into the current production rates. Are the aircraft makers playing chicken or should they go back to full production?


Please post a summary as flightglobal blocks non-members.

FWIW, you being more pessimistic than I is scary. I believe we both see a recovery, it is the intermittent years that will be tough.

Lightsaber


I was more pessimistic than you I think back in the start of this and put the 787 at 5 - close enough to the current 6 and the A350 at 3, A330 at 2 - currently at 5 and 2.

It's actually quite easy to become a Flight Global member - no Money required. They don't really have a table either in that article that is easy to copy.

I don't think they should go back to full production however it may not be that long before they increase production again at least on 787/330 that is where I can see Airlines adding capacity.

Here is not a bad source for World Airline Fleets as of 2018/2019. I'll go through and take a very rough guess on what won't be returning.

https://en.wikipedia.org/wiki/List_of_jet_airliners

Airbus 340 was 159 - might be 20-30 in Private/governmental use - Assume 300 Seats x130 Commercial use frames - 40,000 Seats - now 0.
Airbus 330 was 1,265 - about 500 are pre 2005 - probably not coming back - 270 seats x 1,265 = 341,550 Seats - now 206,550
Airbus A380 was 250 - Lets be optimistic and call it 100 coming back. 250 X 500 Seats = 125,000 - now 50,000 Seats

Boeing 747 was 462 - No Passenger Models coming back other than the 748's - call it a loss of 430 x400 Seats = 172,000 now 30ish? X 400 = 12,000 - that seems like a lot of 747 Passenger models still flying then but the list says no freighters

Boeing 767 was 742 x 240 Seats = 178,080 seats - now what 200? = 48,000 seats

Boeing 777 was 1,416 x 350 Seats = 495,600 - take out the 687 produced pre -2008 leaves you with 255,150.

Very - Very rough totals.

Pre-Covid about 1,352,150 seats available on Widebody Aircraft. Now about 571,700 - a reduction of about 58%.

Then of course you have the 350 and 787 fleets which are about 300,000 seats - so call it reduction of about 47% in Widebody seats.

Thats a lot and of course very - very rough. Demand for new frames should return sooner rather than later once demand exceeds 50% of the old number.

First, thank you for the numbers. I agree that with so many out of service, that a small increase in demand will start having planes return to service.
The 2005 cutoff for the A330 is good, but some went through maintenance checks, but we'll see another 100,000+ seats return.
I'll use Airfleets and sets of 250 for the 787 and 300 for the A350. 958 in service of 996 built. I would expect a return, perhaps subtract the first 26 built due to being way overweight.
A350 379 in service of 396 built. One would expect a return.
https://www.airfleets.net/exploit/exploitation.htm

So using my slightly different numbers, I have a start of 1,721,980 seats.
I assume not all are in service If I use all A350 in service (per airfleets) and say the following. However, I agree, about half the seats are in service. The difference is how many will return. I agree some old aircraft will retired quickly.
I calculate just over 850,000 seats in service, but we will see more return, if only temporarily. e.g., EY, QR, KE/OZ, BA, and LH A380s will temporarily push us over a hundred A380s (I assume 100 EK A380s return to service).
I assume
767: 400 return (temporarily) to passenger duty (hundreds scrapped or made into freighters)
A340: 20 return (who and where, I don't know, but we'll have a thread on it here on a.net, if nothing else, HiFly)
A330: 965 return. I'm just not as pessimistic as you with the limit of validity extension to 60,000 cycles and 180,000 FH, it is super cheap if widebodies are needed to get these back in service. The A330 no longer has the short life it had with a 36,000 FC limit of validity, these planes can keep on going.
787: I expect 976 to return to service (perhaps the teens for a bit, perhaps not)
777: An arbitrary age doesn't mean much on an aircraft with 60,000 FC and 160,000 FH limit of validity. None are close. Oh, most Pratt ones will get scrapped. :cry2:, but not all. I'm guessing 800 return to service just based on past recessions.
747: Yea, toast but for the 748 pretty much.

So I calculate they will quickly and cheaply return to about 63% of prior seating quickly.
The issue of production. New 787s will trend larger (787-10), so I will use 275 seats for going forward production and 325 for the a350 (because the A35K should be a higher fraction of new sales).
So assuming they match each other (60 787s per year, 60 A350s per year) plus 24 A330s at 270 seats each, plus I'm adding 18 777s, but upping to 400 seats for the 779.

That means the "idle" production rate is about 3% per year of 2019 widebody seat capacity. So until we are above 2/3rds above prior demand, it is a tough market.



Add to this some fraction of the prior widebody market will be on narrowbodies. Indigo, JetBlue, AirBaltic, VietJet, and CebuPacific are unlikely to miss out an any opportunity their new longer range narrowbodies provide them.

At this time, I do not see any narrowbody production required until 2023 (this time start of 2023 to replace scrapped MD-80/90 and other older narrowbodies) . I personally think the A319 is doomed. (Airfleets has 1166 still in service). However, we have A320NEO+MAX+A220 production back filling last year and this year and a planned production ramp by both Airbus and Boeing.

The question is predicting what fraction of longhaul demand goes to narrowbody. If traffic is 80% of 2019 at YE 2023 as I estimate (predicted might be a better word), then the widebody capacity will only be 72% of 2019, or short if demand by 8%. Taking the most agressive widebody ramp I can envision (787 to 100/yr as well as A350 100/yr, 777 back to 50/yr, A330 I arbitrarily kept at 24, but I'm not looking for predicting which did what, but rather how many seats), I see 5% could be added per year.

But so many widebodies could return to service if fares justified:

So this is a what if scenario.
A340s, perhaps another 20 to 50 can return.
A330s, I think another 200 (at most) could return
A380: At most another 50, but I would be inclined to max out at 170 return to service
777s, another 200 to 300 could return to service

That is another 14% more of 2019 capacity that could return to service or to 80% of capacity before the 787/A350 production.
Sadly,
With 3% being added just at near idle widebody capacity that either must go up or two lines must shut down...
I see as much as 6% more than is needed in 2023 being available than is needed. :(
That means 2024 demand can be met.
Which means 2025 is the earliest I see in a widebody production recovery. :cry2:

It is good to talk numbers and what fraction of the parked could be assumed not to return.

Lightsaber


Yours makes sense to me - mine was very rough as I said - just trying to get something out there that can be refined.

I think it's a good way to measure it though (Available Widebody seats) compared to how many frames are in or out given how much downsizing will be going on from 747/380/777 to 787/330/350 and also Widebodies downsized to NEO/MAXA321.

The big thing will be the economy. I'm in finance/economics and I can make as good a case for a depression like economy as I can a strong recovery. Who knows what will happen.
 
JayinKitsap
Posts: 2396
Joined: Sat Nov 26, 2005 9:55 am

Re: The case for more aircraft production cuts/playing chicken

Sun Jan 03, 2021 7:02 am

morrisond wrote:
lightsaber wrote:
morrisond wrote:

I was more pessimistic than you I think back in the start of this and put the 787 at 5 - close enough to the current 6 and the A350 at 3, A330 at 2 - currently at 5 and 2.

It's actually quite easy to become a Flight Global member - no Money required. They don't really have a table either in that article that is easy to copy.

I don't think they should go back to full production however it may not be that long before they increase production again at least on 787/330 that is where I can see Airlines adding capacity.

Here is not a bad source for World Airline Fleets as of 2018/2019. I'll go through and take a very rough guess on what won't be returning.

https://en.wikipedia.org/wiki/List_of_jet_airliners

Airbus 340 was 159 - might be 20-30 in Private/governmental use - Assume 300 Seats x130 Commercial use frames - 40,000 Seats - now 0.
Airbus 330 was 1,265 - about 500 are pre 2005 - probably not coming back - 270 seats x 1,265 = 341,550 Seats - now 206,550
Airbus A380 was 250 - Lets be optimistic and call it 100 coming back. 250 X 500 Seats = 125,000 - now 50,000 Seats

Boeing 747 was 462 - No Passenger Models coming back other than the 748's - call it a loss of 430 x400 Seats = 172,000 now 30ish? X 400 = 12,000 - that seems like a lot of 747 Passenger models still flying then but the list says no freighters

Boeing 767 was 742 x 240 Seats = 178,080 seats - now what 200? = 48,000 seats

Boeing 777 was 1,416 x 350 Seats = 495,600 - take out the 687 produced pre -2008 leaves you with 255,150.

Very - Very rough totals.

Pre-Covid about 1,352,150 seats available on Widebody Aircraft. Now about 571,700 - a reduction of about 58%.

Then of course you have the 350 and 787 fleets which are about 300,000 seats - so call it reduction of about 47% in Widebody seats.

Thats a lot and of course very - very rough. Demand for new frames should return sooner rather than later once demand exceeds 50% of the old number.

First, thank you for the numbers. I agree that with so many out of service, that a small increase in demand will start having planes return to service.
The 2005 cutoff for the A330 is good, but some went through maintenance checks, but we'll see another 100,000+ seats return.
I'll use Airfleets and sets of 250 for the 787 and 300 for the A350. 958 in service of 996 built. I would expect a return, perhaps subtract the first 26 built due to being way overweight.
A350 379 in service of 396 built. One would expect a return.
https://www.airfleets.net/exploit/exploitation.htm

So using my slightly different numbers, I have a start of 1,721,980 seats.
I assume not all are in service If I use all A350 in service (per airfleets) and say the following. However, I agree, about half the seats are in service. The difference is how many will return. I agree some old aircraft will retired quickly.
I calculate just over 850,000 seats in service, but we will see more return, if only temporarily. e.g., EY, QR, KE/OZ, BA, and LH A380s will temporarily push us over a hundred A380s (I assume 100 EK A380s return to service).
I assume
767: 400 return (temporarily) to passenger duty (hundreds scrapped or made into freighters)
A340: 20 return (who and where, I don't know, but we'll have a thread on it here on a.net, if nothing else, HiFly)
A330: 965 return. I'm just not as pessimistic as you with the limit of validity extension to 60,000 cycles and 180,000 FH, it is super cheap if widebodies are needed to get these back in service. The A330 no longer has the short life it had with a 36,000 FC limit of validity, these planes can keep on going.
787: I expect 976 to return to service (perhaps the teens for a bit, perhaps not)
777: An arbitrary age doesn't mean much on an aircraft with 60,000 FC and 160,000 FH limit of validity. None are close. Oh, most Pratt ones will get scrapped. :cry2:, but not all. I'm guessing 800 return to service just based on past recessions.
747: Yea, toast but for the 748 pretty much.

So I calculate they will quickly and cheaply return to about 63% of prior seating quickly.
The issue of production. New 787s will trend larger (787-10), so I will use 275 seats for going forward production and 325 for the a350 (because the A35K should be a higher fraction of new sales).
So assuming they match each other (60 787s per year, 60 A350s per year) plus 24 A330s at 270 seats each, plus I'm adding 18 777s, but upping to 400 seats for the 779.

That means the "idle" production rate is about 3% per year of 2019 widebody seat capacity. So until we are above 2/3rds above prior demand, it is a tough market.



Add to this some fraction of the prior widebody market will be on narrowbodies. Indigo, JetBlue, AirBaltic, VietJet, and CebuPacific are unlikely to miss out an any opportunity their new longer range narrowbodies provide them.

At this time, I do not see any narrowbody production required until 2023 (this time start of 2023 to replace scrapped MD-80/90 and other older narrowbodies) . I personally think the A319 is doomed. (Airfleets has 1166 still in service). However, we have A320NEO+MAX+A220 production back filling last year and this year and a planned production ramp by both Airbus and Boeing.

The question is predicting what fraction of longhaul demand goes to narrowbody. If traffic is 80% of 2019 at YE 2023 as I estimate (predicted might be a better word), then the widebody capacity will only be 72% of 2019, or short if demand by 8%. Taking the most agressive widebody ramp I can envision (787 to 100/yr as well as A350 100/yr, 777 back to 50/yr, A330 I arbitrarily kept at 24, but I'm not looking for predicting which did what, but rather how many seats), I see 5% could be added per year.

But so many widebodies could return to service if fares justified:

So this is a what if scenario.
A340s, perhaps another 20 to 50 can return.
A330s, I think another 200 (at most) could return
A380: At most another 50, but I would be inclined to max out at 170 return to service
777s, another 200 to 300 could return to service

That is another 14% more of 2019 capacity that could return to service or to 80% of capacity before the 787/A350 production.
Sadly,
With 3% being added just at near idle widebody capacity that either must go up or two lines must shut down...
I see as much as 6% more than is needed in 2023 being available than is needed. :(
That means 2024 demand can be met.
Which means 2025 is the earliest I see in a widebody production recovery. :cry2:

It is good to talk numbers and what fraction of the parked could be assumed not to return.

Lightsaber


Yours makes sense to me - mine was very rough as I said - just trying to get something out there that can be refined.

I think it's a good way to measure it though (Available Widebody seats) compared to how many frames are in or out given how much downsizing will be going on from 747/380/777 to 787/330/350 and also Widebodies downsized to NEO/MAXA321.

The big thing will be the economy. I'm in finance/economics and I can make as good a case for a depression like economy as I can a strong recovery. Who knows what will happen.


You two make a strong point that it is total number of seats in service. The demand is for a seat between two locations, the passenger doesn't much care which seat, but on average long term the airline that has the best prices has the lowest cost or is willing to have lower margins (or both). The airline that is most selective with its equipment to have the system wide lowest costs (picking the most efficient available for each flight).

Many decisions have been made previously, their effects need to be factored in. The existing fleet is already owned, deliveries are required by contract, so adjust what can be adjusted. Decide which planes return, or how long storage, or retirements. If new A359's are coming, the 772 ER's should go kind of decision.

At an airline, the seats in RJ's, NB's, medium range WB's, and long range WB's need to be reviewed.

Trends in the NB's have been from the 737-7 to -8 size in the past to where it is now -8 to -9, possibly -10, 30 to 40 more seats on each plane.

Above the NB's is the gap targeted by the MOM, there may be more demand here for new as the existing supply is small and dropping as 767's leave.

The long range WB's used to just be 747's until the 340's, 330neo, 350's, 380's, 77W's, and 787's added in. In the 90's a year with 40 747's ordered was a great year, by 2018 3 models were selling over 40 each per year. Far, far too many seats here. Which of these will have decent costs flying 5,000 nm routes.
 
MIflyer12
Posts: 8976
Joined: Mon Feb 18, 2013 11:58 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 08, 2021 6:41 pm

Reuters is reporting a planned Airbus meeting with vendors where production rate cuts/deferrals are expected on the agenda.

https://www.reuters.com/article/us-airb ... 9D1VY?il=0

PARIS (Reuters) - Airbus is planning a summit meeting with major suppliers amid speculation that it may have to delay planned jet output increases as Europe faces a resurgent coronavirus crisis, industry sources said on Friday.

Next week’s briefing by Airbus Chief Executive Guillaume Faury for the heads of several suppliers is expected to set the manufacturing tone for the coming year.
 
JonesNL
Posts: 279
Joined: Tue Aug 06, 2019 2:40 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 08, 2021 9:25 pm

MIflyer12 wrote:
Reuters is reporting a planned Airbus meeting with vendors where production rate cuts/deferrals are expected on the agenda.

https://www.reuters.com/article/us-airb ... 9D1VY?il=0

PARIS (Reuters) - Airbus is planning a summit meeting with major suppliers amid speculation that it may have to delay planned jet output increases as Europe faces a resurgent coronavirus crisis, industry sources said on Friday.

Next week’s briefing by Airbus Chief Executive Guillaume Faury for the heads of several suppliers is expected to set the manufacturing tone for the coming year.


From the delivery thread: they delivered 566 planes last year. Current production is in line with this number. I am guessing that Airlines cant take any more birds if further reduction is plannen...
 
User avatar
Polot
Posts: 11199
Joined: Thu Jul 28, 2011 3:01 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 08, 2021 10:06 pm

JonesNL wrote:
MIflyer12 wrote:
Reuters is reporting a planned Airbus meeting with vendors where production rate cuts/deferrals are expected on the agenda.

https://www.reuters.com/article/us-airb ... 9D1VY?il=0

PARIS (Reuters) - Airbus is planning a summit meeting with major suppliers amid speculation that it may have to delay planned jet output increases as Europe faces a resurgent coronavirus crisis, industry sources said on Friday.

Next week’s briefing by Airbus Chief Executive Guillaume Faury for the heads of several suppliers is expected to set the manufacturing tone for the coming year.


From the delivery thread: they delivered 566 planes last year. Current production is in line with this number. I am guessing that Airlines cant take any more birds if further reduction is plannen...

As the pandemic drags on without improvement maintaining this years delivery rate will get more and more difficult. Eventually the lack of meaningful revenue coming in is going to impact ability to take new planes and source financing.
 
Tiredofhumanity
Posts: 77
Joined: Sat Sep 19, 2020 9:27 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 08, 2021 11:16 pm

lightsaber wrote:
morrisond wrote:
lightsaber wrote:
While the side discussion is facinating, please tie into the current production rates. Are the aircraft makers playing chicken or should they go back to full production?


Please post a summary as flightglobal blocks non-members.

FWIW, you being more pessimistic than I is scary. I believe we both see a recovery, it is the intermittent years that will be tough.

Lightsaber


I was more pessimistic than you I think back in the start of this and put the 787 at 5 - close enough to the current 6 and the A350 at 3, A330 at 2 - currently at 5 and 2.

It's actually quite easy to become a Flight Global member - no Money required. They don't really have a table either in that article that is easy to copy.

I don't think they should go back to full production however it may not be that long before they increase production again at least on 787/330 that is where I can see Airlines adding capacity.

Here is not a bad source for World Airline Fleets as of 2018/2019. I'll go through and take a very rough guess on what won't be returning.

https://en.wikipedia.org/wiki/List_of_jet_airliners

Airbus 340 was 159 - might be 20-30 in Private/governmental use - Assume 300 Seats x130 Commercial use frames - 40,000 Seats - now 0.
Airbus 330 was 1,265 - about 500 are pre 2005 - probably not coming back - 270 seats x 1,265 = 341,550 Seats - now 206,550
Airbus A380 was 250 - Lets be optimistic and call it 100 coming back. 250 X 500 Seats = 125,000 - now 50,000 Seats

Boeing 747 was 462 - No Passenger Models coming back other than the 748's - call it a loss of 430 x400 Seats = 172,000 now 30ish? X 400 = 12,000 - that seems like a lot of 747 Passenger models still flying then but the list says no freighters

Boeing 767 was 742 x 240 Seats = 178,080 seats - now what 200? = 48,000 seats

Boeing 777 was 1,416 x 350 Seats = 495,600 - take out the 687 produced pre -2008 leaves you with 255,150.

Very - Very rough totals.

Pre-Covid about 1,352,150 seats available on Widebody Aircraft. Now about 571,700 - a reduction of about 58%.

Then of course you have the 350 and 787 fleets which are about 300,000 seats - so call it reduction of about 47% in Widebody seats.

Thats a lot and of course very - very rough. Demand for new frames should return sooner rather than later once demand exceeds 50% of the old number.

First, thank you for the numbers. I agree that with so many out of service, that a small increase in demand will start having planes return to service.
The 2005 cutoff for the A330 is good, but some went through maintenance checks, but we'll see another 100,000+ seats return.
I'll use Airfleets and sets of 250 for the 787 and 300 for the A350. 958 in service of 996 built. I would expect a return, perhaps subtract the first 26 built due to being way overweight.
A350 379 in service of 396 built. One would expect a return.
https://www.airfleets.net/exploit/exploitation.htm

So using my slightly different numbers, I have a start of 1,721,980 seats.
I assume not all are in service If I use all A350 in service (per airfleets) and say the following. However, I agree, about half the seats are in service. The difference is how many will return. I agree some old aircraft will retired quickly.
I calculate just over 850,000 seats in service, but we will see more return, if only temporarily. e.g., EY, QR, KE/OZ, BA, and LH A380s will temporarily push us over a hundred A380s (I assume 100 EK A380s return to service).
I assume
767: 400 return (temporarily) to passenger duty (hundreds scrapped or made into freighters)
A340: 20 return (who and where, I don't know, but we'll have a thread on it here on a.net, if nothing else, HiFly)
A330: 965 return. I'm just not as pessimistic as you with the limit of validity extension to 60,000 cycles and 180,000 FH, it is super cheap if widebodies are needed to get these back in service. The A330 no longer has the short life it had with a 36,000 FC limit of validity, these planes can keep on going.
787: I expect 976 to return to service (perhaps the teens for a bit, perhaps not)
777: An arbitrary age doesn't mean much on an aircraft with 60,000 FC and 160,000 FH limit of validity. None are close. Oh, most Pratt ones will get scrapped. :cry2:, but not all. I'm guessing 800 return to service just based on past recessions.
747: Yea, toast but for the 748 pretty much.

So I calculate they will quickly and cheaply return to about 63% of prior seating quickly.
The issue of production. New 787s will trend larger (787-10), so I will use 275 seats for going forward production and 325 for the a350 (because the A35K should be a higher fraction of new sales).
So assuming they match each other (60 787s per year, 60 A350s per year) plus 24 A330s at 270 seats each, plus I'm adding 18 777s, but upping to 400 seats for the 779.

That means the "idle" production rate is about 3% per year of 2019 widebody seat capacity. So until we are above 2/3rds above prior demand, it is a tough market.

Add to this some fraction of the prior widebody market will be on narrowbodies. Indigo, JetBlue, AirBaltic, VietJet, and CebuPacific are unlikely to miss out an any opportunity their new longer range narrowbodies provide them.

At this time, I do not see any narrowbody production required until 2023 (this time start of 2023 to replace scrapped MD-80/90 and other older narrowbodies) . I personally think the A319 is doomed. (Airfleets has 1166 still in service). However, we have A320NEO+MAX+A220 production back filling last year and this year and a planned production ramp by both Airbus and Boeing.

The question is predicting what fraction of longhaul demand goes to narrowbody. If traffic is 80% of 2019 at YE 2023 as I estimate (predicted might be a better word), then the widebody capacity will only be 72% of 2019, or short if demand by 8%. Taking the most agressive widebody ramp I can envision (787 to 100/yr as well as A350 100/yr, 777 back to 50/yr, A330 I arbitrarily kept at 24, but I'm not looking for predicting which did what, but rather how many seats), I see 5% could be added per year.

But so many widebodies could return to service if fares justified:

So this is a what if scenario.
A340s, perhaps another 20 to 50 can return.
A330s, I think another 200 (at most) could return
A380: At most another 50, but I would be inclined to max out at 170 return to service
777s, another 200 to 300 could return to service

That is another 14% more of 2019 capacity that could return to service or to 80% of capacity before the 787/A350 production.
Sadly,
With 3% being added just at near idle widebody capacity that either must go up or two lines must shut down...
I see as much as 6% more than is needed in 2023 being available than is needed. :(
That means 2024 demand can be met.
Which means 2025 is the earliest I see in a widebody production recovery. :cry2:

It is good to talk numbers and what fraction of the parked could be assumed not to return.

Lightsaber


Wouldn't the same logic you used on older 777 variants and lower-MTOW A333's and 332's also apply to 763's built after 1994?
 
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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 09, 2021 1:27 am

Polot wrote:
JonesNL wrote:
MIflyer12 wrote:
Reuters is reporting a planned Airbus meeting with vendors where production rate cuts/deferrals are expected on the agenda.

https://www.reuters.com/article/us-airb ... 9D1VY?il=0

PARIS (Reuters) - Airbus is planning a summit meeting with major suppliers amid speculation that it may have to delay planned jet output increases as Europe faces a resurgent coronavirus crisis, industry sources said on Friday.

Next week’s briefing by Airbus Chief Executive Guillaume Faury for the heads of several suppliers is expected to set the manufacturing tone for the coming year.


From the delivery thread: they delivered 566 planes last year. Current production is in line with this number. I am guessing that Airlines cant take any more birds if further reduction is plannen...

As the pandemic drags on without improvement maintaining this years delivery rate will get more and more difficult. Eventually the lack of meaningful revenue coming in is going to impact ability to take new planes and source financing.

The need for new planes is an economic driven even. I believe the current recession will be worse for aviation than either 9/11 or the GFC (housing bubble). Now much depends on China (they never corrected their real estate bubble...) and will businesses be motivated to grow.

There were many (link below says 70) vaccines under development. Unfortunately, the most difficult to manufacture (per my opinion) were available first. Demand cannot restart until it is safe to do normal business travel.

https://time.com/5819887/coronavirus-va ... pment-who/

From that prior reuters link:
"Airbus is involved in a stand-off with some suppliers who want guaranteed or upfront payments for parts to support any increase, in case volatile demand falls again. Those companies are in turn receiving similar demands from their own suppliers."

It isn't a standoff when vendors cannot afford to be accomodating. The shared risk model only works when risk is shared. Companies had to borrow in this industry to survive. They cannot go out and borrow again for a possible production surge.

It is the 3rd tier vendors struggling, in my opinion (well, I've heard more, but dang NDAs...). If they need upfront payments... the whole system is broken, it was based on growth (in my opinion) and not a sudden stop

The other 3rd tier vendors have switched to medical supplies. They want better terms from Aerospace or... get in line. For example we use a lot if cryogenic stuff; it should be no shock to anyone that crogenic compatible stuff is in demand for those Vaccine freezers right now, at emergency rates of compensation. So we wait...

I haven't changed my opinion of the recovery curve. I wonder if I will go from a bear to two years from now the bull? As scary as the economic news is, it was baked into my prediction.



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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 09, 2021 2:04 am

Tiredofhumanity wrote:
lightsaber wrote:
morrisond wrote:

I was more pessimistic than you I think back in the start of this and put the 787 at 5 - close enough to the current 6 and the A350 at 3, A330 at 2 - currently at 5 and 2.

It's actually quite easy to become a Flight Global member - no Money required. They don't really have a table either in that article that is easy to copy.

I don't think they should go back to full production however it may not be that long before they increase production again at least on 787/330 that is where I can see Airlines adding capacity.

Here is not a bad source for World Airline Fleets as of 2018/2019. I'll go through and take a very rough guess on what won't be returning.

https://en.wikipedia.org/wiki/List_of_jet_airliners

Airbus 340 was 159 - might be 20-30 in Private/governmental use - Assume 300 Seats x130 Commercial use frames - 40,000 Seats - now 0.
Airbus 330 was 1,265 - about 500 are pre 2005 - probably not coming back - 270 seats x 1,265 = 341,550 Seats - now 206,550
Airbus A380 was 250 - Lets be optimistic and call it 100 coming back. 250 X 500 Seats = 125,000 - now 50,000 Seats

Boeing 747 was 462 - No Passenger Models coming back other than the 748's - call it a loss of 430 x400 Seats = 172,000 now 30ish? X 400 = 12,000 - that seems like a lot of 747 Passenger models still flying then but the list says no freighters

Boeing 767 was 742 x 240 Seats = 178,080 seats - now what 200? = 48,000 seats

Boeing 777 was 1,416 x 350 Seats = 495,600 - take out the 687 produced pre -2008 leaves you with 255,150.

Very - Very rough totals.

Pre-Covid about 1,352,150 seats available on Widebody Aircraft. Now about 571,700 - a reduction of about 58%.

Then of course you have the 350 and 787 fleets which are about 300,000 seats - so call it reduction of about 47% in Widebody seats.

Thats a lot and of course very - very rough. Demand for new frames should return sooner rather than later once demand exceeds 50% of the old number.

First, thank you for the numbers. I agree that with so many out of service, that a small increase in demand will start having planes return to service.
The 2005 cutoff for the A330 is good, but some went through maintenance checks, but we'll see another 100,000+ seats return.
I'll use Airfleets and sets of 250 for the 787 and 300 for the A350. 958 in service of 996 built. I would expect a return, perhaps subtract the first 26 built due to being way overweight.
A350 379 in service of 396 built. One would expect a return.
https://www.airfleets.net/exploit/exploitation.htm

So using my slightly different numbers, I have a start of 1,721,980 seats.
I assume not all are in service If I use all A350 in service (per airfleets) and say the following. However, I agree, about half the seats are in service. The difference is how many will return. I agree some old aircraft will retired quickly.
I calculate just over 850,000 seats in service, but we will see more return, if only temporarily. e.g., EY, QR, KE/OZ, BA, and LH A380s will temporarily push us over a hundred A380s (I assume 100 EK A380s return to service).
I assume
767: 400 return (temporarily) to passenger duty (hundreds scrapped or made into freighters)
A340: 20 return (who and where, I don't know, but we'll have a thread on it here on a.net, if nothing else, HiFly)
A330: 965 return. I'm just not as pessimistic as you with the limit of validity extension to 60,000 cycles and 180,000 FH, it is super cheap if widebodies are needed to get these back in service. The A330 no longer has the short life it had with a 36,000 FC limit of validity, these planes can keep on going.
787: I expect 976 to return to service (perhaps the teens for a bit, perhaps not)
777: An arbitrary age doesn't mean much on an aircraft with 60,000 FC and 160,000 FH limit of validity. None are close. Oh, most Pratt ones will get scrapped. :cry2:, but not all. I'm guessing 800 return to service just based on past recessions.
747: Yea, toast but for the 748 pretty much.

So I calculate they will quickly and cheaply return to about 63% of prior seating quickly.
The issue of production. New 787s will trend larger (787-10), so I will use 275 seats for going forward production and 325 for the a350 (because the A35K should be a higher fraction of new sales).
So assuming they match each other (60 787s per year, 60 A350s per year) plus 24 A330s at 270 seats each, plus I'm adding 18 777s, but upping to 400 seats for the 779.

That means the "idle" production rate is about 3% per year of 2019 widebody seat capacity. So until we are above 2/3rds above prior demand, it is a tough market.

Add to this some fraction of the prior widebody market will be on narrowbodies. Indigo, JetBlue, AirBaltic, VietJet, and CebuPacific are unlikely to miss out an any opportunity their new longer range narrowbodies provide them.

At this time, I do not see any narrowbody production required until 2023 (this time start of 2023 to replace scrapped MD-80/90 and other older narrowbodies) . I personally think the A319 is doomed. (Airfleets has 1166 still in service). However, we have A320NEO+MAX+A220 production back filling last year and this year and a planned production ramp by both Airbus and Boeing.

The question is predicting what fraction of longhaul demand goes to narrowbody. If traffic is 80% of 2019 at YE 2023 as I estimate (predicted might be a better word), then the widebody capacity will only be 72% of 2019, or short if demand by 8%. Taking the most agressive widebody ramp I can envision (787 to 100/yr as well as A350 100/yr, 777 back to 50/yr, A330 I arbitrarily kept at 24, but I'm not looking for predicting which did what, but rather how many seats), I see 5% could be added per year.

But so many widebodies could return to service if fares justified:

So this is a what if scenario.
A340s, perhaps another 20 to 50 can return.
A330s, I think another 200 (at most) could return
A380: At most another 50, but I would be inclined to max out at 170 return to service
777s, another 200 to 300 could return to service

That is another 14% more of 2019 capacity that could return to service or to 80% of capacity before the 787/A350 production.
Sadly,
With 3% being added just at near idle widebody capacity that either must go up or two lines must shut down...
I see as much as 6% more than is needed in 2023 being available than is needed. :(
That means 2024 demand can be met.
Which means 2025 is the earliest I see in a widebody production recovery. :cry2:

It is good to talk numbers and what fraction of the parked could be assumed not to return.

Lightsaber


Wouldn't the same logic you used on older 777 variants and lower-MTOW A333's and 332's also apply to 763's built after 1994?

I posted earlier that hundreds of 767s would become freighters.

The 767 has the advantage of a smaller wingspan, while this is is an efficiency hit, in freight duty it allows tighter packing of aircraft on limited ramp space. The 767-300ER has no range or MTOW handicap.

Many will return, but they were kept as the lowest cost per flight for the range. That makes them very likely to be replaced.

I personally think low MTOW A330s are poor conversion stock. With Bedek (IAI) and Boeing competing for orders... I see demand.

https://cargofacts.com/allposts/convers ... ond/?amp=1

Not to mention Amazon is buying up so many 767s for conversion,:
https://www.airlive.net/amazon-buys-11- ... nversions/

The 767 is for lowest cost per flight for the range. The A321LR/xLR will brutalize the pax market. I didn't disagree with the prior post conclusion.

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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 09, 2021 5:19 pm

That's an impressive amount of information Lightsaber. Thank you.

For me, however, the key numbers are the world economic indicators with regard to recovery from C19. And remember, there was a glut of widebodies in the late 2010s to begin with.

https://www.seattletimes.com/business/b ... body-jets/

I am very bearish on Boeing and only slightly less so on Airbus. They both may eventually require eventual government bailout. Bad times ahead.
 
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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 09, 2021 7:05 pm

lightsaber wrote:
The need for new planes is an economic driven even. I believe the current recession will be worse for aviation than either 9/11 or the GFC (housing bubble). Now much depends on China (they never corrected their real estate bubble...) and will businesses be motivated to grow.

There were many (link below says 70) vaccines under development. Unfortunately, the most difficult to manufacture (per my opinion) were available first. Demand cannot restart until it is safe to do normal business travel.

https://time.com/5819887/coronavirus-va ... pment-who/

From that prior reuters link:
"Airbus is involved in a stand-off with some suppliers who want guaranteed or upfront payments for parts to support any increase, in case volatile demand falls again. Those companies are in turn receiving similar demands from their own suppliers."

It isn't a standoff when vendors cannot afford to be accomodating. The shared risk model only works when risk is shared. Companies had to borrow in this industry to survive. They cannot go out and borrow again for a possible production surge.

It is the 3rd tier vendors struggling, in my opinion (well, I've heard more, but dang NDAs...). If they need upfront payments... the whole system is broken, it was based on growth (in my opinion) and not a sudden stop

Not just Airbus. Boeing have more structure and better NDA's, with vendors exercising put options to exit, which can be harmed / lost by publicity.

For A & B, they either have to re-price existing contracts, re-negotiate, place elsewhere or bring in-house.

Further complicated, as some vendors have A or B equity. How helpful is a partly owned B vendor going to be in respect to an A contract v B contract?
 
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Re: The case for more aircraft production cuts/playing chicken

Sat Jan 09, 2021 7:17 pm

Polot wrote:
As the pandemic drags on without improvement maintaining this years delivery rate will get more and more difficult. Eventually the lack of meaningful revenue coming in is going to impact ability to take new planes and source financing.

Something has got to give. A & B are currently directly and indirectly funding both ends, supporting vendors paying for engines and parts not required in the short - medium term, and customers financing delivered and ready to be delivered aircraft.

With some exceptions, the pre-shipment finance market has vanished, so most milestone payments are being made by customers, or deferred. Majority of delivery payments are being made from accrued credits, so no cash injection for the OEM's. Ditto for final withholding payments.
 
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Re: The case for more aircraft production cuts/playing chicken

Sun Jan 10, 2021 12:04 am

SteelChair wrote:
That's an impressive amount of information Lightsaber. Thank you.

For me, however, the key numbers are the world economic indicators with regard to recovery from C19. And remember, there was a glut of widebodies in the late 2010s to begin with.

https://www.seattletimes.com/business/b ... body-jets/

I am very bearish on Boeing and only slightly less so on Airbus. They both may eventually require eventual government bailout. Bad times ahead.

We can agree on their being a glut. I fully admit being late to recognize it (several posters here noted a good year or two before I), but as I'm in aerospace, perhaps I just didn't want to see it? ;)

It will be key numbers and I think they will be brutal, but I also think my prior predictions assumed a similar economic turn of events to the path we went down. So far, initial vaccine is lagging my estimates while it looks like production will far exceed, making for about the same 2021 impact overall.

We'll get through this, it is just getting through the reset to the new normal that will be brutal.

Sadly, I must cancel a planned trip. I hoped to have a vaccine by now, but I won't in time to take the trip.

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Re: The case for more aircraft production cuts/playing chicken

Sun Jan 10, 2021 12:11 am

smartplane wrote:
lightsaber wrote:
The need for new planes is an economic driven even. I believe the current recession will be worse for aviation than either 9/11 or the GFC (housing bubble). Now much depends on China (they never corrected their real estate bubble...) and will businesses be motivated to grow.

There were many (link below says 70) vaccines under development. Unfortunately, the most difficult to manufacture (per my opinion) were available first. Demand cannot restart until it is safe to do normal business travel.

https://time.com/5819887/coronavirus-va ... pment-who/

From that prior reuters link:
"Airbus is involved in a stand-off with some suppliers who want guaranteed or upfront payments for parts to support any increase, in case volatile demand falls again. Those companies are in turn receiving similar demands from their own suppliers."

It isn't a standoff when vendors cannot afford to be accomodating. The shared risk model only works when risk is shared. Companies had to borrow in this industry to survive. They cannot go out and borrow again for a possible production surge.

It is the 3rd tier vendors struggling, in my opinion (well, I've heard more, but dang NDAs...). If they need upfront payments... the whole system is broken, it was based on growth (in my opinion) and not a sudden stop

Not just Airbus. Boeing have more structure and better NDA's, with vendors exercising put options to exit, which can be harmed / lost by publicity.

For A & B, they either have to re-price existing contracts, re-negotiate, place elsewhere or bring in-house.

Further complicated, as some vendors have A or B equity. How helpful is a partly owned B vendor going to be in respect to an A contract v B contract?

Please don't take it the wrong way, I ignored Boeing as they use the same vendors as we do and OMG is that going to muck up our purchases.
Boeing is going to have to reprice everything and some vendors are going to say no. Some vendors will take their IP with them (e.g., a specific proven design is theirs, they are just refusing to sell to Boeing on prior terms). I didn't mean to imply just Airbus. I meant the whole 3rd tier vendor system. As I posted above, the whole system is broken. Not just for A & B, but for Lockheed, Northrop, Textron, Gulfstream, Bombardier, Embraer, and Dassault too (if I missed anyone's favorite airframer, it wasn't by malice, I just thought the list was long enough).

In my opinion, the entire aerospace 3rd tier vendor system is broken. :cry2: By no means are we the only industry (small business is in far worse shape). This isn't one country, this is global and it is going to effect air travel for years as well as hotels, rental cars, and the sale of small little drink bottles for years to come. Some of the numbers I see say the "top line" numbers of nations "doing well" aren't really doing that well, but that is another thread.

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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 14, 2021 2:36 pm

So 8 787-8 and 29-787-9 just hit the market. That is a whopping 6 months of worth of production. So we have another half a year of overproduction, just from Norwegian ending long haul.
 
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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 14, 2021 4:38 pm

Fluidflow,
Just to add to your comment, this tests the 787 resale market. I believe this will hurt the whole widebody market as the supply/demand curve just became a little worse.

Thread on Norwegian exiting long haul:
viewtopic.php?f=3&t=1456671&p=22603969#p22603969

On the narrowbody front, Boeing is about to increase production to 15/month (180/yr) going to 31/month by early 2021. Low 40s per month (500/year) planned in 2023 That high rate concerns me, for when added to the parked fleet, that will impact the whole industry.

https://leehamnews.com/2021/01/14/hotr- ... more-35612

From the same link, Airbus is at rate 40 (430 per year, the about 10.5 month production means a Boeing rate 40 is about 12% more aircraft in a year than an Airbus rate 40... Be careful talking Airbus monthly rates versus any other company. Going to rate 47 (s/b 500/year, about 18 months before Boeing, but without the surge of parked feliveries). I consider this far too much as I just cannot create a scenario where a thousand narrowbodies per year is needed by 2023.

The oversupply of today's longer range narrowbodies bodes poorly for the widebody recovery. Airports that can grow their narrowbodies use will have a huge advantage: Daxing (Beijing), ICN (Seoul), CGK (Jakarta), KUL (Kuala Lumpur), and DEN (Denver) come to mind as airports that will benefit from the shift.

This is really bad for widebodies at the low end that compete with the A321xLR. (788, A339).

While I want production because I have serious concerns about the vendor network I expressed in my last post, I'm old enough to recall how overproduction can create a lost decade.

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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 14, 2021 5:42 pm

Fascinating thread, thanks for all the great insights Lightsaber and everyone else. I still think the leisure rebound will be surprisingly robust as soon as the developed world gets vaccinated and countries fully open to tourism.

I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.
 
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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 14, 2021 6:36 pm

Jetport wrote:
Fascinating thread, thanks for all the great insights Lightsaber and everyone else. I still think the leisure rebound will be surprisingly robust as soon as the developed world gets vaccinated and countries fully open to tourism.
...

Possible, but not guaranteed. Still, air transport sector made money in business travel, and leisure traveller was a tool to help cover costs, not the main source of income. Ergo, air travel sector risks becoming poorer, even if planes are flown, and seats are (somehow) filled.

Jetport wrote:
...
I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.

Experts can do these comparisons better than me. But the idea of this thread is not that there is a magic new plane that sends to scrap yard existing fleets. The idea is that there is much less money available to buy shiny new jets, going forward -- any jets.

In this vein, A321xLR is not necessarily going to wipe out existing,
fully paid for/depreciated 767/A330/787
. It is competing for money spent on NEW planes. And with less business demand, and first-class pax either deserting to fly business jets, or downgrading to business class, the "experience" that demanded widebodies on some routes, is no longer required. So a narrow-body business-class seat could work out.

Again, A321xLR is NOT a Death Star that'll kill widebody world. But it continues to shift the calculation away to narrowbodies. In 1970s-80s, US transcon market, AFAIR, was widebodies and an occasional 757. Look at it now.
AN4 A40 L4T TU3 TU5 IL6 ILW I93 F50 F70 100 146 ARJ AT7 DH4 L10 CRJ ERJ E90 E95 DC-9 MD-8X YK4 YK2 SF3 S20 319 320 321 332 333 343 346 722 732 733 734 735 73G 738 739 744 74M 757 767 777
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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 14, 2021 7:06 pm

Jetport wrote:
Fascinating thread, thanks for all the great insights Lightsaber and everyone else. I still think the leisure rebound will be surprisingly robust as soon as the developed world gets vaccinated and countries fully open to tourism.

I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.

Well, let us look at a non-a.net perspective:
https://www.cnn.com/travel/article/airb ... index.html

The XLR will be able to link cities like Rome and New York, London and Delhi, and Tokyo and Sydney.

Think about the range increase. For example, narrobodies from West Coast USA to Hawaii needed the 3100nm 738 with Sharklets and an engine PiP. Now the narrowbodies are flying much further thanks to Hawaiian's A321LR.

Here is a rangemap for what I consider usable range from JFK. 4200nm in a JetBlue config, take a 15% cut for winds, ATC, etc. and 3570nm:
http://www.gcmap.com/mapui?R=3570nm%40jfk

From LGW, add a nice chunk if the US midwest, not to DEL in a nice spaced LCC
http://www.gcmap.com/mapui?R=3570nm%40lgw

Let us do Indigo from BOM, a mere 3400nm circle with winds. In a ULCC they cannot make London, but most if Europe:

http://www.gcmap.com/mapui?R=3570nm%40bom

Narrobodies have been taking over widebody routes my whole life. At first, they couldn't do TCON, but a wingleted 738 could as could an A320 in a moderate density. Sharklets and the Select One/Two engine PiPs have allowed JetBlue to go back to 162 seats.

Narrobodies are much more flexible. Fly at a higher frequency in busy season, send them to other destinations in Winter.

Year,Range Narrowbodies, note
2000 about 2800nm, JetBlue had winter flight trouble until reduced seats to 150.

2009 3100nm, Alaska starts in Nov flights to Hawaii

Then we have the NEO, A220
and MAX:
A220, 3400nm, AirBaltic flew lonf thin to AUH
A320NEO 3500nm
-8 MAX: 3550nm, Norwegian was flying TATL
A321NEO: 4000nm (for LR): Hawaiian further inland and Indigo to IST

A321xLRv4700nm

That doesn't doom widebodies, but I would guess about 40% of widebody flight are in range. Adding about 16% more range to the A321 is significant. Exact data? No.

But Dublin is adding a runway. I expect a good fraction of traffic will be connections. Larger cities/cargo on widebodies. We should expect a number of new cities on long haul narrowbodies.

This will hurt smaller widebody sales and resale values.

A763ER only has a 5,980 nm range. While that doesn't mean the 767 can fully be replaced, DL has already announced a 2025 retirement:
https://thepointsguy.com/news/delta-boe ... etirement/

As to A330 replacement, basically up to the 5200nm aircraft are likely to be replaced. Yes, sales increased nicely when 5700nm and then 6200nm range came in, so only a partial.

While you are not interested in routes with blocked seats during the winter, TATL demand is so low in the winter, it wouldn't surprise me to see routes flown further out with 30 to 50 seats blocked.

Between Norwegian returning 787s and longer range narrowbodies, the widebody market will be smaller than before.

I cannot supply an exact number. I would note that narrowbody costs are so much lower than a widebody, I don't think the purchase price effects the decision much.

I posted upthread links on the plummet in widebody resale values. They are worse than narrowbodies; I believe that us logical.

Lightsaber
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iamlucky13
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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 14, 2021 8:43 pm

FluidFlow wrote:
So 8 787-8 and 29-787-9 just hit the market. That is a whopping 6 months of worth of production. So we have another half a year of overproduction, just from Norwegian ending long haul.


Keep in mind it was the plummet in the demand that caused Norwegian to drop out of international flying, not the other way around. From a 30,000 foot perspective, these frames were already excess, rather than another addition to the excess. We just have to wait to see which specific operators are parking or selling frames. As it happens, the flying demand shifts to the other carriers.

Of course, the market trouble is real, even if knew it was coming. Lightsaber is certainly correct this tests the market. It's a pop quiz we knew was coming, but weren't sure what would be on it.

I guess it shouldn't be a surprise Norwegian has ended up being a major contributor to the parked fleets. They were considered in danger of bankruptcy even before the pandemic.

lightsaber wrote:
On the narrowbody front, Boeing is about to increase production to 15/month (180/yr) going to 31/month by early 2021.


Leeham reported that wrong. The time frame for 31 per month is early 2022. I presume that was just a typo.

lightsaber wrote:
I consider this far too much as I just cannot create a scenario where a thousand narrowbodies per year is needed by 2023.


I think I agree with that. I'm comparatively "bullish" on near term production rates for the sake of supply and demand smoothing, which means building up extra inventory now, but delaying a return to the pre-pandemic production rates as the backlog of either undelivered or delivered and underutilized aircraft is cleared. Looking at the IATA recovery forecast again, assuming the pandemic does show signs of being permanently under control in the north hemisphere summer this year, I'm not uncomfortable with 31 + 40 narrowbodies per month next year, but going higher makes me worry about a roller coaster recovery.

Even the 31 + 40 scenario, as I see it, likely relies on a combination of accelerated retirements and a period of lower load factors. The pre-pandemic load factors were historically unprecedented and enabled by rapid demand growth. I expect we'll see a natural trend toward slightly lower load factors and utilization rates even as restrictions go away because previously the market was constrained in the supply of available seats, but that is no longer the case.

Like Leeham, I don't expect to see either manufacturer seriously talking about 60+ narrowbodies anytime soon. Maybe in 2023 we'll start to have credible predictions of when those rates will be seen again.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 8:17 am

What I wonder is, what will happen with the cargo market. We know that right now there is not enough capacity and traditional passenger airlines actually fly cargo flights (either with removed seats, or just with a full belly). Now cargo airlines are adding more aircraft, A321P2Fs are coming in, 767, 777 and 747s are newly produced and we have 767 and 737 conversions. 330 and 777 conversions are also planned or already slowly converted and increases for the conversion lines are planned. While route frequency will still help traditional airlines to get some cargo, we might have a lot of pure cargo capacity available towards the end of the decade. This will start to hurt the wide body aircraft on relative short routes. If you can not fill the belly and struggle to fill the cabin on a 3500-4000nm flight this route will be downgraded to a narrow body aircraft.

This will even further depress wide body demand.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 1:29 pm

smartplane wrote:
Polot wrote:
As the pandemic drags on without improvement maintaining this years delivery rate will get more and more difficult. Eventually the lack of meaningful revenue coming in is going to impact ability to take new planes and source financing.

Something has got to give. A & B are currently directly and indirectly funding both ends, supporting vendors paying for engines and parts not required in the short - medium term, and customers financing delivered and ready to be delivered aircraft.

With some exceptions, the pre-shipment finance market has vanished, so most milestone payments are being made by customers, or deferred. Majority of delivery payments are being made from accrued credits, so no cash injection for the OEM's. Ditto for final withholding payments.


Thanks, I think that I have got all that.
Small speculation = I have wondered if Boeing shutting-down the MAX line (now) way-back would not now be seen as a positive?

Presumably those negotiations of which you speak were conducted some time ago & financial adjustments made then.
Basically I wonder if, in some degree, Boeing "got lucky" with the timing?
cheers
Billy
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 2:05 pm

FluidFlow wrote:
What I wonder is, what will happen with the cargo market. We know that right now there is not enough capacity and traditional passenger airlines actually fly cargo flights (either with removed seats, or just with a full belly). Now cargo airlines are adding more aircraft, A321P2Fs are coming in, 767, 777 and 747s are newly produced and we have 767 and 737 conversions. 330 and 777 conversions are also planned or already slowly converted and increases for the conversion lines are planned. While route frequency will still help traditional airlines to get some cargo, we might have a lot of pure cargo capacity available towards the end of the decade. This will start to hurt the wide body aircraft on relative short routes. If you can not fill the belly and struggle to fill the cabin on a 3500-4000nm flight this route will be downgraded to a narrow body aircraft.

This will even further depress wide body demand.

I agree that low cost freight conversion stock will reduce belly cargo yield making quite a few flights less viable on a widebody. I posted upthread about how the cargo market was hurting in 2019. Once we have belly freight return, the cargo market will undergo a shock down, in particular once the Covid19 panic ends.

I expect the airlines with cash and a good technical team will be buying used at very attractive pricing.

If demand is say 800 aircraft per year snd production is a thousand plus, that means retirements are easy planning and used aircraft values plummet. (I've already posted the Leeham link upthread):
https://leehamnews.com/2020/11/09/ponti ... ts-plunge/

Current aircraft vales, for 15 year old aircraft are down 20% to 47%. Lease rates are down brutally for widebodies. You can lease an A332 for $165k per month. That is a plane ripe for freight conversion.

The recovery will depend on fuel pricing. For example, I am in favor of 30% biofuel. That would increase the price of JetA by 10% (my best SWAG). That fuel price increase would drive out older aircraft, but nice and slow, which is best for everyone. Now, this is a thread on manufacturing chicken, this isn't to debate an off topic, but rather emphasize a small fuel price increase favors new build. A big fuel price increase will result in many liquidations and reduced demand for aircraft due to the cost shock.

Lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 2:33 pm

Jetport wrote:
Fascinating thread, thanks for all the great insights Lightsaber and everyone else. I still think the leisure rebound will be surprisingly robust as soon as the developed world gets vaccinated and countries fully open to tourism.

I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.


:D
About 2-3 years ago I started my one-and-only thread, which was about the A321neo.
My thesis was that it was so great that Boeing just could NOT let it go unchallenged.
For my thoughts I received (among others) a significant amount of criticism that I was "too hyper" about the type.
That it was good, but (of course), it had weaknesses.

Fast-forward to 2021 - absolutely.
Things have changed.
The A321XLR has a huge fan-base - especially here on a.net.
But heaps of small WBs are also sitting out in the desert.

As a "cattle class" pax, my favourite frame BAR NONE is the 767.
Now many small WBs are available for a song.

Why would anybody buy a hyper-expensive A321XLR which is immediately challenged for payload/range?
Why not buy a small WB sitting in the desert, which is in a wholly superior performance class?
- not too mention, that it comes for peanuts?


PS - Got me! I know that the reader immediately thinks "767"!
But the demand for 767s now seems to be in excess of the supply(?).
And Boeing looks to be building+selling brand-new 767s - well - forever.

DESPITE IT STILL HAVING EXACTLY THE SAME ENGINE AND WING FOR 40 YEARS!

(Goes around, ... !)

So yeah, if I was wanting to do a cut-price TATL in 2 years time a dirt-cheap 767 would look very pretty - if you can get one.
:D

SPOILER - I can feel another thread coming on!
Which 737MAX will be a substantially better LR model when compared to the A321XLR?
The -8?
The -9?
Over to you!
:D

cheers
Billy
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 2:51 pm

Jetport wrote:
Fascinating thread, thanks for all the great insights Lightsaber and everyone else. I still think the leisure rebound will be surprisingly robust as soon as the developed world gets vaccinated and countries fully open to tourism.

I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.


Airbus already sold about 500 XLRs. If that is hyperbolic for you it is certainly not for airbus.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 3:03 pm

RalXWB wrote:
Jetport wrote:
Fascinating thread, thanks for all the great insights Lightsaber and everyone else. I still think the leisure rebound will be surprisingly robust as soon as the developed world gets vaccinated and countries fully open to tourism.

I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.


Airbus already sold about 500 XLRs. If that is hyperbolic for you it is certainly not for airbus.

You mean 'it has orders for.' It hasn't actually sold any yet, in the meaning of a completed delivery sales transaction.

Orders don't mean as much as you want to think. How many of the US orders for A350s in 2005 got delivered? How many of the NW 787s from the same year? How many of the UA A350s from 2009 have been delivered? And on and on.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 3:24 pm

Jetport wrote:

I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round ...


That's an interesting question. You framed this as number of route, and of course widebodies aren't flown to the limit of their range/payload capacity with every route so it's not a short list. You will also find those widebodies on routes that are within range but have ample demand and frequency already and so are unlikely to be displaced, like NYC-LHR and ORD-LHR.. Outside of NA widebodies (generally) widebodies see 'regional' use that could be met with current narrow bodies, even narrow bodies of four decades ago - yet they fill an A330 routinely.

Some routes gave cargo demand.

XLR range is marginally longer than 757-200 range while LR is shorter. Of course the XLR has lower CASM. But ask yourself how many 757s found TATL, or MIA - deep S America use? Or the equivalent 4000+ sm distances anywhere. Historical facts and analysis beat enthusiasm in financial decision making. There is room for route fragmentation - the success of the 787 vs the A380 proved that beyond any informed doubt. The big advantage of the XLR from an investment perspective is that it didn't need a clean sheet start and $10 Billion in development costs. It can probably generate acceptable ROI on sales of 300 instead of 1500.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 6:34 pm

I think the prevailing thought is that the smallest plane that has sufficient range is the best choice unless there is some other reason (slot constraint, flow too large at certain time, administrative constraint)
 
inkjet7
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 15, 2021 6:45 pm

morrisond wrote:
The one thing that could be very helpful for the industry is to set Greener environmental goals so frames that are less Green than say A320 NEO, A350, MAX, 777X and 787 aren't allowed to fly after say 2030.

That may happen in some countries anyways. Even if it would only support some parties' green goals.
 
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Re: The case for more aircraft production cuts/playing chicken

Sun Jan 17, 2021 4:00 pm

Jetport wrote:
I have a question on the A321xLR hype, which I think is more than a little hyperbolic on Anet. How many 767/A330/787 routes currently flown can the A321xLR really do year round with a full passenger load? This board seems to think it is a very, very high percentage, does anyone have any data to back this up? Again, I am interested in routes the A321xLR can do year round with full loads, not routes that require winter tech stops or 30 seats blocked. Also, a fully paid for/depreciated 767/A330/787 makes a lot more sense than an overpriced new A321xLR even with some empty seats on the widebody's since they can get significant freight revenue the maxed out A321xLR frame can't.


I suspect that in looking into the distance for the logic, you are missing the thing that is right under your nose.

The primary reason I think the XLR gets the attention, and the acclaim that it does is because it squeezes the bottom end of the widebody market hard by being the smallest, cheapest to operate frame that will do the job, but does so whilst for the operators being to all intents and purposes just another A321NEO
It has the same empty weight as an A321NEO with 1 ACT, and the same cargo/baggage volume as an A321NEO with 1 ACT. It just flies about 1,000Nm further..

It makes it incredibly versatile, flexible, easy to accommodate in an all-narrowbody fleet, removes the need for another family of aircraft ....
THAT's why the MOM/NMA business case could never close.
And its why the positive comments about the A321XLR are not hype. It's a home run. :yes:

And it is also one of the key reasons why Airbus has a more robust underpinning to its narrowbody production rate than Boeing does

iamlucky13 wrote:
I'm not uncomfortable with 31 + 40 narrowbodies per month next year, but going higher makes me worry about a roller coaster recovery.

Even the 31 + 40 scenario, as I see it, likely relies on a combination of accelerated retirements and a period of lower load factors. The pre-pandemic load factors were historically unprecedented and enabled by rapid demand growth. I expect we'll see a natural trend toward slightly lower load factors and utilization rates even as restrictions go away because previously the market was constrained in the supply of available seats, but that is no longer the case..


I think you've hit on a number of things here.
We are already seeing a number of the biggest narrowbody users quite prepared to take new metal at the expense of retiring older frames - Indigo, Southwest, Ryanair are all taking their new planes.
I think I agree with you that load factors will ease for a few years.
But I also see more capable narrowbodys, like the A321LR/XLR and MAX10 eating into widebody space for quite some time to come, strengthening narrowbody demand and weakening widebody demand further.
It doesn't help that the widebody market was already massively oversupplied before Covid, and production rates were already tanking as a result.

From a specifically narrowbody viewpoint I have a bit of an intellectual issue with the title of the thread.
I'm sure that what we are seeing is far more intelligent and consensual than the title suggests.
Please note that whilst delivery numbers overall declined last year, deliveries of A321NEO actually increased.
I don't think that's an accident.
And it's not because of hype either :)

Rgds
 
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Re: The case for more aircraft production cuts/playing chicken

Sun Jan 17, 2021 5:34 pm

I'll answer the 2nd part first. While some airlines are being wise taking new, I personally estimate the number of aircraft being returned and parked is going to impact the market for years. I like to model scenarios. Even with the A321xLR and replacement to more efficient aircraft *and* heavy discounting of new aircraft, I think there will be more aircraft on the market than needed. Yes, airlines like Indigo are retiring very new A320CEOs and replacing them with A321NEOs. For them, that is a great decision. That means a hundred very young A320CEOs need to find a home.

I'm in Aerospace R&D. I want, heck my career needs new aircraft to sell to fund our efforts.
Lease rates are down 25% (for already cheap aircraft that could be scrapped for similar return) to 40%. Sale prices have droped 20% plus for used:
https://leehamnews.com/2020/11/09/ponti ... ts-plunge/

More production will mean more young used aircraft are available and the freight market can only absorb so many. My opinion is that once the market restarts, airlines will re-evaluate and my economic modeling has more aircraft entering the used market instead of the market absorbing aircraft on a global scale. Oh, Ryanair, Indigo, Allegiant, VietJet, SouthWest, and Volotea are all airlines I see growing and growing faster than the market. Even with that, I think more narrowbodies will be looking for a home than the market can support, further depressing prices. Analogous to how long it took the 2009 housing bubble to find its bottom, just with aircraft.

astuteman wrote:
I suspect that in looking into the distance for the logic, you are missing the thing that is right under your nose.

The primary reason I think the XLR gets the attention, and the acclaim that it does is because it squeezes the bottom end of the widebody market hard by being the smallest, cheapest to operate frame that will do the job, but does so whilst for the operators being to all intents and purposes just another A321NEO
It has the same empty weight as an A321NEO with 1 ACT, and the same cargo/baggage volume as an A321NEO with 1 ACT. It just flies about 1,000Nm further..

It makes it incredibly versatile, flexible, easy to accommodate in an all-narrowbody fleet, removes the need for another family of aircraft ....
THAT's why the MOM/NMA business case could never close.
And its why the positive comments about the A321XLR are not hype. It's a home run. :yes

Rgds

This is where Airbus has a *huge* advantage. It isn't just widebody airlines. Suddenly Indigo (LCC, 4000nm range, a nice improvement over their current A321NEO), JetBlue, Middle East Airlines (launch custoer, or at least they were) and American with a nice large order for 50:
https://onemileatatime.com/american-air ... xlr-order/

Astuteman, you hit the point, it is just another A32x family member. You do not need many extra spares (probably different fuel meter, fuel pump, and a plumbing item I forgot to mention) and otherwise, just rotate it in. I worked in 2000 with AA on the A321NEO and the A321xLR is what they have been asking for for decades. Now, I will disagree on the NMA business case not being closable, but that is another thread.

What matters is for many airlines, the A321xLR allows them to open up new markets without adding a new type or consolidating their types. E.g., Delta and United could buy it without adding complexity. Lufthansa has talked down the idea, but I believe only because their hubs are further inland for TATL travel and the Asia markets it would open up, India, I don't see as much growth as a LHR based airline (where India is at the limit of A321xLR range in a 2 class and could really only serve a slide of India):
http://www.gcmap.com/mapui?R=4000nm%40lhr

But in a 2-class, look at all those US and Caribbean destinations that could open. From BOS and DUB, an excellent opportunity.

So I look at a market shift. One on the order of the 767 taking over the TATL routes. The first TATL 767 wasn't until 1984.
In 1985 a TriStar was replaced by a 767 for TATL. The first downgauge from a triple engine.
It wasn't until 1993 that the entire 767 family had ETOPS 180 min (Hawaii and better TATL routing for economics)
By 2000 50% of TATL crossing were on 767s (and much earlier, in 1991, Twin traffic exceeded 3 and four engine traffic TATL):

https://www.avgeekery.com/the-boeing-76 ... -happened/

So I see various airlines for various reasons switching from widebody traffic to narrowbody. I posted upthread how in 2019 (with links) how freight traffic was struggling in 2019. I hypothesize that once widebody traffic is back up to say 2/3rds of prior, freight rates will correct back down to normal.

So I am of the opinion narrowbody deliveries will be too high. New deliveries will continue until the used market effects aircraft financing so much that
I also am of the opinion we will see something analogous to the 767 on its markets. So Airbus had a huge short term advantage. I say short term as the wingloading on the A321xLR is suboptimal for the length of missions and the old school wing costs, by my estimate, 4% in fuel burn and out of date subsystems cost another 3%. Do not get me wrong, time to market was key, but leaving that much on the table means some one else will see the opportunity.

If I think narrowbody deliveries are too high and the A321xLR is going to displace widebodies...
That means my opinion on widebodies is very bearish. In particular those that have poor economics of scale that induce higher maintenance costs.

There will still be widebody flights and not just flights out of narrowbody range. For example, JFK-LHR/CDG/FRA will still have profitable belly cargo, so a widebody has a great business case. Same with PEK/Daxing or Shabnghi to any capital city in the world. The question is what fraction of the demand will be met by the A321xLR? I think it (or an unannounced narrowbody competitor) will meet half the passenger demand in its economical range by 2030. My opinion based on how I watched twins, in particular the 767, steadily take over the TATL market. Yes, the A330, once it had more payload at range, came in later, but I see the market more analogous to the formative stage where an imperfectly optimized airframe, at the lowest cost per flight, is just what the market needs and will take the market via first mover advantage.

The NMA was to produce a small widebody more analogous to a narrowbody economics. When I do estimates, I see a business case. Delta until Covid19 hit still wanted a NMA:
https://thepointsguy.com/news/delta-wan ... build-nma/

I see holes in the current market offerings:
1. A modern RJ. With the MRJ debacle, that slot is open. I could see a turboprop, but the MRJ was trending well enough in fuel burn that if it had been delivered, it wouldn't have just replaced RJs, it would have cut costs enough to replace turboprops in my opinion.
2. A 752/A321 or 753 sized narrowbody optimized better for 4+ hour missions. A CFRP wing with folding wingtips (to fit into A321xLR gate) and modern subsystems is the minimum.
3. A new small widebody optimized for shorter (say up to 5,000 nm missions) utilizing as much 'hand me down' technology as possible, but with the advantage of the squared/cubed law that bigger isn't that much heavier and the wing will have much more fuel space. This plane needs everything the above plane needs, but must get to market first or it is done.

So the A321xLR window is limited, unless it gets a new wing (opens the window another 7 years, in my opinion).

What the A321xLR means is many short range widebodies will be hurt and the smaller widebodies the most. Any A330 (CEO or NEO) or 788 route, 752, or 767 route will be the first routes down-gauged.
e
Airlines stuck with the wrong old metal will go bankrupt or be the next TWA (a once great airline struggling to recover). For myself, I love flying Delta and JetBlue. I have zero Th

I'm waiting for the 2020 number of this to be updated. Last negative was 2009. I think we're going to experience a negative greater than any post WW2 negative:
https://www.macrotrends.net/countries/W ... rowth-rate

I do not see a return to 2019 until 2025 in passengers carried. I hope to be proven a pessimist.

Lightsaber
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JonesNL
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Re: The case for more aircraft production cuts/playing chicken

Mon Jan 18, 2021 3:33 pm

lightsaber wrote:
......

I see holes in the current market offerings:
1. A modern RJ. With the MRJ debacle, that slot is open. I could see a turboprop, but the MRJ was trending well enough in fuel burn that if it had been delivered, it wouldn't have just replaced RJs, it would have cut costs enough to replace turboprops in my opinion.
2. A 752/A321 or 753 sized narrowbody optimized better for 4+ hour missions. A CFRP wing with folding wingtips (to fit into A321xLR gate) and modern subsystems is the minimum.
3. A new small widebody optimized for shorter (say up to 5,000 nm missions) utilizing as much 'hand me down' technology as possible, but with the advantage of the squared/cubed law that bigger isn't that much heavier and the wing will have much more fuel space. This plane needs everything the above plane needs, but must get to market first or it is done.
.....

Lightsaber


For how many units do you see for each hole in the market offering?
 
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Re: The case for more aircraft production cuts/playing chicken

Mon Jan 18, 2021 5:44 pm

Anecdotal, because market is so much depressed and travel restrictions are hitting hard on that market, but TS is partially replacing A330 with A321 on YUL-CDG, at the present time. And its A310, smaller wide bodies if ever were, have been completely retired last spring.

(I mean this as an illustration of Lightsaber's vision)
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
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Re: The case for more aircraft production cuts/playing chicken

Mon Jan 18, 2021 8:00 pm

JonesNL wrote:
lightsaber wrote:
......

I see holes in the current market offerings:
1. A modern RJ. With the MRJ debacle, that slot is open. I could see a turboprop, but the MRJ was trending well enough in fuel burn that if it had been delivered, it wouldn't have just replaced RJs, it would have cut costs enough to replace turboprops in my opinion.
2. A 752/A321 or 753 sized narrowbody optimized better for 4+ hour missions. A CFRP wing with folding wingtips (to fit into A321xLR gate) and modern subsystems is the minimum.
3. A new small widebody optimized for shorter (say up to 5,000 nm missions) utilizing as much 'hand me down' technology as possible, but with the advantage of the squared/cubed law that bigger isn't that much heavier and the wing will have much more fuel space. This plane needs everything the above plane needs, but must get to market first or it is done.
.....

Lightsaber


For how many units do you see for each hole in the market offering?

I can only make long term (20 year) estimates.

1. For a scope compliant 76 seat RJ, some where between 1200 and 1500 planes.
2. For a narrowbody optimized for longer missions, it could be 1500 to 2000 (I assume a NSA truncates the smaller portion of the market).
3. The NMA depends on when a longer ranger and larger narrowbody comes out. It will take over the 767, A332, and half the A339 niche. So somewhere between 600 to 1600. If Boeing hadn't done the MAX debacle, it would have beaten that top end. If the large narrowbody comes out before it, it will be towards the low end of the range.

I work in Aerospace R&D. We are always looking at what customers will pay more for (for only then is it worth investing billions). The A350, 787, and 777x have taken care of large widebodies.

Partially I am obsessed as I worked the A346. I learned always anticipate the competition. If you pick a good niche, for example if the NMA, if it had been on time, you lock the competition out of a market. But if you don't anticipate, e.g. plan on the 787-10 vs. A339, or the A321xLR vs. MAX 10, then the market shrinks dramatically.

When there is a recovery, I will always root on new aircraft as it pays my salary (or is more likely to). However, after multiple prior downturns, I am very familiar on how the horde of parked airplanes haunts the new market (e.g., DL bringing back NW's parked A320s, buying MD-90s, and Leasing the forlorn B717).

I do see certain aircraft doomed (B717, A319, end of the pax duty for 733 and also 73G). That list will pull down the scrap value of larger siblings, but then freight conversions will boost it (see A321P2F thread for off topic discussion on how the 738 and by my interpretation the A321 freight conversions went from too expensive of aircraft to convert to really popular in 2020).
Link to P2F thread:
viewtopic.php?f=3&t=1439571

Boeing lucked out. Their widebodies are far healthier thanks to the 767F and 777F than without. I saw a need for a 777xF before Covid19.

But this thread is on over-production. I like to create little spreadsheets to estimate low, nominal, and high aircraft demand. I see the market oversupplied at the end of 2019, in particular widebodies.

I am more bearish than Boeing's CMO:
https://www.boeing.com/commercial/marke ... t-outlook/

If you scale it, we need as many seats about year end 2025 as we had year end 2019. That means every aircraft made in between is effectively replacement. Yet narrowbodies will be at 1000 per year in 2023.

I wish Airbus hasn't skipped their Global market Forecast in 2020.

I believe:

1. regional flying will go to narrobodies. In part as all the designs available were marginally competitive vs. A320CEO and 737NG pre-sharklets/scimitar winglets and engine Pips (E.g., Select One and Two). The A220 and E2-195 carry passengers too much cheaper. I might be biased as with a good set of algorithms, I see the Allegiant/Breeze/Volotea model of getting in the markets with 2x+ frequencies per week as a successful market.
2. I also see the A220 snd E2-195 growing market share as people like P2P. For those who only see their local airport impacted, reference Beijing's Daxing airport, Jakarta expansion, Denver, Salt Lake City, Charlotte (CLT), Panama City, Dublin (DUB), Paris (CDG) Istanbul (IST and SAW), ADD (sorry, I'd misspell it), Philadelphia, and Moscow (SVO) for where you will connect. If I missed your favorite hub that can expand, it only strengthens my argument.
3. 150 to 200 seat narrowbodies will grow their fraction of the market, but I still see them over-produced until 2025. In 2026, I see a starting shortage. A small market reduction if a better long range narrowbody.
4. Small widebodies (up to 250 or so seats): If they do not outrange the A321xLR for a mission, report to freight conversion to be assimulated. Market will shrink with an NMA or better optimized long haul narrowbody.
5. Mid-widebodies market share will grow, but due to continued deliveries of A350 and 787 beyond market needs, I only see a trickle of orders. The 788 and A330NEO are in a precarious position. The A350 and 787 are strangling the rest of the market.
6. Large widebodies. Hello 777F life raft. I would bet on 777x cancellation if it wasn't for the 777LRF sold as the 777F and credible rumors of a 777xF. There is no need for a 779 before 2027 IMHO, but Boeing has contracts. There is a need for a 777xF, so I expect that development to sustain the supply chain.

I consider aircraft far more fungible than most here on a.net because my opinion was changed by multiple sales campaigns. There are times an aircraft stands out as an obvious choice (A330, 77W in their heydays) and times where multiple will sell.

There are dark days ahead, in my opinion, for the industry.

Lightsaber
3 months without TV. The best decision of my life.
 
JonesNL
Posts: 279
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 9:41 am

lightsaber wrote:
JonesNL wrote:
lightsaber wrote:
......

I see holes in the current market offerings:
1. A modern RJ. With the MRJ debacle, that slot is open. I could see a turboprop, but the MRJ was trending well enough in fuel burn that if it had been delivered, it wouldn't have just replaced RJs, it would have cut costs enough to replace turboprops in my opinion.
2. A 752/A321 or 753 sized narrowbody optimized better for 4+ hour missions. A CFRP wing with folding wingtips (to fit into A321xLR gate) and modern subsystems is the minimum.
3. A new small widebody optimized for shorter (say up to 5,000 nm missions) utilizing as much 'hand me down' technology as possible, but with the advantage of the squared/cubed law that bigger isn't that much heavier and the wing will have much more fuel space. This plane needs everything the above plane needs, but must get to market first or it is done.
.....

Lightsaber


For how many units do you see for each hole in the market offering?

I can only make long term (20 year) estimates.

1. For a scope compliant 76 seat RJ, some where between 1200 and 1500 planes.
2. For a narrowbody optimized for longer missions, it could be 1500 to 2000 (I assume a NSA truncates the smaller portion of the market).
3. The NMA depends on when a longer ranger and larger narrowbody comes out. It will take over the 767, A332, and half the A339 niche. So somewhere between 600 to 1600. If Boeing hadn't done the MAX debacle, it would have beaten that top end. If the large narrowbody comes out before it, it will be towards the low end of the range.

I work in Aerospace R&D. We are always looking at what customers will pay more for (for only then is it worth investing billions). The A350, 787, and 777x have taken care of large widebodies.
......

Lightsaber

I am a bit hesitant on the business case of the (3)NMA: even if it launches successfully, an new wing (2)A322 with a later launch and earlier EIS will kill the business case too easily. Almost like a sitting duck. 600 units probably is not enough for the break even point when looking at development costs. Recoup $25mil a plane when development cost is a conservative $15bil.

It seems that the scope complaint bird is the easiest way to have an solid business case. Wonder why nobody is jumping ship?
 
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seahawk
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 10:34 am

The key of the XLR is the flexibility. For a European airline it can mean fly it to MIA or the Caribbean in Winter and use it to PMI, Canaries and Greece in summer.

I see 3 parts of the market, that are open for a new plane.

- turboprop around 40-70 seats - single pilot ops when possible
- turboprop around 70-110 seats
- longer ranged single aisle with 752 size. That is the XLR at the moment and the slot is practically blocked by the idea of a big wing A321.
 
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 1:39 pm

seahawk wrote:
The key of the XLR is the flexibility. For a European airline it can mean fly it to MIA or the Caribbean in Winter and use it to PMI, Canaries and Greece in summer.

I see 3 parts of the market, that are open for a new plane.

- turboprop around 40-70 seats - single pilot ops when possible
- turboprop around 70-110 seats
- longer ranged single aisle with 752 size. That is the XLR at the moment and the slot is practically blocked by the idea of a big wing A321.

Why do you not see an opportunity for an RJ? The US scope is a large market. Perhaps because I live and fly in the Western US where distances are beyond what I want to spend on a prop.

The CF-34-8 or CF-34-10 were never an efficient engines.

Lightsaber
3 months without TV. The best decision of my life.
 
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seahawk
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 2:19 pm

lightsaber wrote:
seahawk wrote:
The key of the XLR is the flexibility. For a European airline it can mean fly it to MIA or the Caribbean in Winter and use it to PMI, Canaries and Greece in summer.

I see 3 parts of the market, that are open for a new plane.

- turboprop around 40-70 seats - single pilot ops when possible
- turboprop around 70-110 seats
- longer ranged single aisle with 752 size. That is the XLR at the moment and the slot is practically blocked by the idea of a big wing A321.

Why do you not see an opportunity for an RJ? The US scope is a large market. Perhaps because I live and fly in the Western US where distances are beyond what I want to spend on a prop.

The CF-34-8 or CF-34-10 were never an efficient engines.

Lightsaber


Because I think that the market outside the US has focused on the larger siblings of RJ like E2-190 and A220. Starting a new design to match US scope clauses is imho risky, as there are always rumours about them being changed and any plane designed to fit the scope clauses would be uncompetitive once they are removed or moved up. And then there are the different scope clauses for each US major, some being limited by the length of routes, others by the exact routes and so on. Lots of what Delta flies is turboprop territory imho.
Embraer or Airbus can really wait, till the planes are either up for replacement or uneconomic and then see the scope clauses adjusted to fit at least the 175E2 maybe even the 190E2 and A221. Once the A319s and 737-700s are leaving the fleets in numbers the scope clauses will imho change.
 
MIflyer12
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 2:57 pm

seahawk wrote:
The key of the XLR is the flexibility.


That isn't a new attribute. 757s got 120-minute ETOPS certified in 1986, an aircraft of comparable capacity and TATL range. 757/767ERs were significantly smaller increments of capacity than the DC-10s or L-1011s in use at the time. So it isn't a question of what airport pairs are within XLR range, but what airport pairs above what the 757 offered already are within range? Then subtract some of those are big enough to support an A330/787.

Just how many hundred of XLRs do you think LH needs to service FRA-MIA adequately? How many airport pairs do you foresee normalized to a year-round basis?

The 321XLR is modestly interesting in that it allows JetBlue to do TATL from BOS/JFK without a new type. A revolution is not built around an order for thirteen aircraft. It wouldn't give AS TPAC nor continental TATL from SEA.

UA's EWR hub is perfect for XLRs - NYC is the biggest TATL O&D market and UA can service secondary and tertiary European destinations. I'll point out that was exactly CO's plan with 757s fifteen years ago with EWR-Cologne, Belfast, Bristol... DL at JFK is rather less perfect since DL fragments ops across JFK/LGA. I could see DL converting for thirty-forty with delivery in, say, 2026-2030 as all the 757s depart.

I can't see XLR production making up a significant fraction of total NEO output (more than 1/4?) over the next decade. And that's how we get back to the thread topic: the argument for production cuts.
 
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 4:52 pm

First let me note that this topic is going a bit off-topic with the gaps in the current market. But I think it's an interesting subject.
About current oversupply/overproduction. Of course currently there is overproduction. The aviation market reduced to <50% of 2019 levels. Recovery to 2019 level won't happen before 2023 at the earliest. So many aircraft will be parked or see light usage between March 2020 and End 2023, that's nearly 4 years.
If my understanding is correct; in the market forecasts by 2039 only 10-15% of the 2020 fleet is still operating as passenger aircraft. A small single digit percentage of the fleet will be converted into freighters. The rest is retired/scrapped.
So to determine if there really currently is oversupply, or to little old aircraft are phased out, the age buildup of the aircraft fleet has to be determined. Does anyone know a source for this, or are we up to the challenge of determining this?

I think the situation in Europe is different than in the USA. In Europe stowing aircraft is expansive, because there isn't much stowage capability. (Hardly any bondyards) So there is a financial decision between stowing for several years at cost, or writing off by part-out and scrapping. I think SA have a shorter live expectancy than WB aircraft. I wouldn't be surprised when >80% of 20+ year old SA aircraft and >50% of 15-20year old SA aircraft won't return to service in Europe.
This would mean a huge fleet age reduction, a bunkers large capital write off. Engine EOM's will be hurt, but current production is not to high. Again I think we'll need insight into the fleet age buildup to really make usefull statements.
 
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seahawk
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 8:05 pm

MIflyer12 wrote:
seahawk wrote:
The key of the XLR is the flexibility.


That isn't a new attribute. 757s got 120-minute ETOPS certified in 1986, an aircraft of comparable capacity and TATL range. 757/767ERs were significantly smaller increments of capacity than the DC-10s or L-1011s in use at the time. So it isn't a question of what airport pairs are within XLR range, but what airport pairs above what the 757 offered already are within range? Then subtract some of those are big enough to support an A330/787.
.


You misunderstood me, the flexibility is not the range it covers, the flexibility is the small penalty, that it has, if you put it on normal short to medium haul routes.
 
Opus99
Posts: 1514
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Re: The case for more aircraft production cuts/playing chicken

Tue Jan 19, 2021 8:34 pm

lightsaber wrote:
JonesNL wrote:
lightsaber wrote:
......

I see holes in the current market offerings:
1. A modern RJ. With the MRJ debacle, that slot is open. I could see a turboprop, but the MRJ was trending well enough in fuel burn that if it had been delivered, it wouldn't have just replaced RJs, it would have cut costs enough to replace turboprops in my opinion.
2. A 752/A321 or 753 sized narrowbody optimized better for 4+ hour missions. A CFRP wing with folding wingtips (to fit into A321xLR gate) and modern subsystems is the minimum.
3. A new small widebody optimized for shorter (say up to 5,000 nm missions) utilizing as much 'hand me down' technology as possible, but with the advantage of the squared/cubed law that bigger isn't that much heavier and the wing will have much more fuel space. This plane needs everything the above plane needs, but must get to market first or it is done.
.....

Lightsaber


For how many units do you see for each hole in the market offering?

I can only make long term (20 year) estimates.

1. For a scope compliant 76 seat RJ, some where between 1200 and 1500 planes.
2. For a narrowbody optimized for longer missions, it could be 1500 to 2000 (I assume a NSA truncates the smaller portion of the market).
3. The NMA depends on when a longer ranger and larger narrowbody comes out. It will take over the 767, A332, and half the A339 niche. So somewhere between 600 to 1600. If Boeing hadn't done the MAX debacle, it would have beaten that top end. If the large narrowbody comes out before it, it will be towards the low end of the range.

I work in Aerospace R&D. We are always looking at what customers will pay more for (for only then is it worth investing billions). The A350, 787, and 777x have taken care of large widebodies.

Partially I am obsessed as I worked the A346. I learned always anticipate the competition. If you pick a good niche, for example if the NMA, if it had been on time, you lock the competition out of a market. But if you don't anticipate, e.g. plan on the 787-10 vs. A339, or the A321xLR vs. MAX 10, then the market shrinks dramatically.

When there is a recovery, I will always root on new aircraft as it pays my salary (or is more likely to). However, after multiple prior downturns, I am very familiar on how the horde of parked airplanes haunts the new market (e.g., DL bringing back NW's parked A320s, buying MD-90s, and Leasing the forlorn B717).

I do see certain aircraft doomed (B717, A319, end of the pax duty for 733 and also 73G). That list will pull down the scrap value of larger siblings, but then freight conversions will boost it (see A321P2F thread for off topic discussion on how the 738 and by my interpretation the A321 freight conversions went from too expensive of aircraft to convert to really popular in 2020).
Link to P2F thread:
viewtopic.php?f=3&t=1439571

Boeing lucked out. Their widebodies are far healthier thanks to the 767F and 777F than without. I saw a need for a 777xF before Covid19.

But this thread is on over-production. I like to create little spreadsheets to estimate low, nominal, and high aircraft demand. I see the market oversupplied at the end of 2019, in particular widebodies.

I am more bearish than Boeing's CMO:
https://www.boeing.com/commercial/marke ... t-outlook/

If you scale it, we need as many seats about year end 2025 as we had year end 2019. That means every aircraft made in between is effectively replacement. Yet narrowbodies will be at 1000 per year in 2023.

I wish Airbus hasn't skipped their Global market Forecast in 2020.

I believe:

1. regional flying will go to narrobodies. In part as all the designs available were marginally competitive vs. A320CEO and 737NG pre-sharklets/scimitar winglets and engine Pips (E.g., Select One and Two). The A220 and E2-195 carry passengers too much cheaper. I might be biased as with a good set of algorithms, I see the Allegiant/Breeze/Volotea model of getting in the markets with 2x+ frequencies per week as a successful market.
2. I also see the A220 snd E2-195 growing market share as people like P2P. For those who only see their local airport impacted, reference Beijing's Daxing airport, Jakarta expansion, Denver, Salt Lake City, Charlotte (CLT), Panama City, Dublin (DUB), Paris (CDG) Istanbul (IST and SAW), ADD (sorry, I'd misspell it), Philadelphia, and Moscow (SVO) for where you will connect. If I missed your favorite hub that can expand, it only strengthens my argument.
3. 150 to 200 seat narrowbodies will grow their fraction of the market, but I still see them over-produced until 2025. In 2026, I see a starting shortage. A small market reduction if a better long range narrowbody.
4. Small widebodies (up to 250 or so seats): If they do not outrange the A321xLR for a mission, report to freight conversion to be assimulated. Market will shrink with an NMA or better optimized long haul narrowbody.
5. Mid-widebodies market share will grow, but due to continued deliveries of A350 and 787 beyond market needs, I only see a trickle of orders. The 788 and A330NEO are in a precarious position. The A350 and 787 are strangling the rest of the market.
6. Large widebodies. Hello 777F life raft. I would bet on 777x cancellation if it wasn't for the 777LRF sold as the 777F and credible rumors of a 777xF. There is no need for a 779 before 2027 IMHO, but Boeing has contracts. There is a need for a 777xF, so I expect that development to sustain the supply chain.

I consider aircraft far more fungible than most here on a.net because my opinion was changed by multiple sales campaigns. There are times an aircraft stands out as an obvious choice (A330, 77W in their heydays) and times where multiple will sell.

There are dark days ahead, in my opinion, for the industry.

Lightsaber

Are we sure Boeing will launch the 777XF. Consensus here seems to be cargo market prefers used and cheaper jets
 
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Re: The case for more aircraft production cuts/playing chicken

Wed Jan 20, 2021 5:16 pm

I'm facinated by the rationale airlines downsizing. TAP + PLR is downsizing.
Accepting A32x NEO
Returning 34 (might be 35) A32x CEOs (mostly A319) and 3 A332 (replaced by A339).

This is an example of the rotation out caused by continued deliveries above market demand. Some will be parted. Some will become freighters. Most will find a new home suppressing used aircraft values which will effect new aircraft financing terms.



Opus99 wrote:
lightsaber wrote:
JonesNL wrote:

For how many units do you see for each hole in the market offering?

I can only make long term (20 year) estimates.

1. For a scope compliant 76 seat RJ, some where between 1200 and 1500 planes.
2. For a narrowbody optimized for longer missions, it could be 1500 to 2000 (I assume a NSA truncates the smaller portion of the market).
3. The NMA depends on when a longer ranger and larger narrowbody comes out. It will take over the 767, A332, and half the A339 niche. So somewhere between 600 to 1600. If Boeing hadn't done the MAX debacle, it would have beaten that top end. If the large narrowbody comes out before it, it will be towards the low end of the range.

I work in Aerospace R&D. We are always looking at what customers will pay more for (for only then is it worth investing billions). The A350, 787, and 777x have taken care of large widebodies.

Partially I am obsessed as I worked the A346. I learned always anticipate the competition. If you pick a good niche, for example if the NMA, if it had been on time, you lock the competition out of a market. But if you don't anticipate, e.g. plan on the 787-10 vs. A339, or the A321xLR vs. MAX 10, then the market shrinks dramatically.

When there is a recovery, I will always root on new aircraft as it pays my salary (or is more likely to). However, after multiple prior downturns, I am very familiar on how the horde of parked airplanes haunts the new market (e.g., DL bringing back NW's parked A320s, buying MD-90s, and Leasing the forlorn B717).

I do see certain aircraft doomed (B717, A319, end of the pax duty for 733 and also 73G). That list will pull down the scrap value of larger siblings, but then freight conversions will boost it (see A321P2F thread for off topic discussion on how the 738 and by my interpretation the A321 freight conversions went from too expensive of aircraft to convert to really popular in 2020).
Link to P2F thread:
viewtopic.php?f=3&t=1439571

Boeing lucked out. Their widebodies are far healthier thanks to the 767F and 777F than without. I saw a need for a 777xF before Covid19.

But this thread is on over-production. I like to create little spreadsheets to estimate low, nominal, and high aircraft demand. I see the market oversupplied at the end of 2019, in particular widebodies.

I am more bearish than Boeing's CMO:
https://www.boeing.com/commercial/marke ... t-outlook/

If you scale it, we need as many seats about year end 2025 as we had year end 2019. That means every aircraft made in between is effectively replacement. Yet narrowbodies will be at 1000 per year in 2023.

I wish Airbus hasn't skipped their Global market Forecast in 2020.

I believe:

1. regional flying will go to narrobodies. In part as all the designs available were marginally competitive vs. A320CEO and 737NG pre-sharklets/scimitar winglets and engine Pips (E.g., Select One and Two). The A220 and E2-195 carry passengers too much cheaper. I might be biased as with a good set of algorithms, I see the Allegiant/Breeze/Volotea model of getting in the markets with 2x+ frequencies per week as a successful market.
2. I also see the A220 snd E2-195 growing market share as people like P2P. For those who only see their local airport impacted, reference Beijing's Daxing airport, Jakarta expansion, Denver, Salt Lake City, Charlotte (CLT), Panama City, Dublin (DUB), Paris (CDG) Istanbul (IST and SAW), ADD (sorry, I'd misspell it), Philadelphia, and Moscow (SVO) for where you will connect. If I missed your favorite hub that can expand, it only strengthens my argument.
3. 150 to 200 seat narrowbodies will grow their fraction of the market, but I still see them over-produced until 2025. In 2026, I see a starting shortage. A small market reduction if a better long range narrowbody.
4. Small widebodies (up to 250 or so seats): If they do not outrange the A321xLR for a mission, report to freight conversion to be assimulated. Market will shrink with an NMA or better optimized long haul narrowbody.
5. Mid-widebodies market share will grow, but due to continued deliveries of A350 and 787 beyond market needs, I only see a trickle of orders. The 788 and A330NEO are in a precarious position. The A350 and 787 are strangling the rest of the market.
6. Large widebodies. Hello 777F life raft. I would bet on 777x cancellation if it wasn't for the 777LRF sold as the 777F and credible rumors of a 777xF. There is no need for a 779 before 2027 IMHO, but Boeing has contracts. There is a need for a 777xF, so I expect that development to sustain the supply chain.

I consider aircraft far more fungible than most here on a.net because my opinion was changed by multiple sales campaigns. There are times an aircraft stands out as an obvious choice (A330, 77W in their heydays) and times where multiple will sell.

There are dark days ahead, in my opinion, for the industry.

Lightsaber

Are we sure Boeing will launch the 777XF. Consensus here seems to be cargo market prefers used and cheaper jets

It is the natural successor to the factory 777F. For some fraction of the long haul (high utilization) fleet, newer (fuel efficient) is preferred (TPAC, Europe to Eastern Asia).

I do R&D for aerospace and a big part is identifying potential market size. I see a need for 300 to 500 777 sized freighters over 20 years, about half should be new.

Let us look at the CMO. Click and see 930 new freighter deliveries out of 2430. There will, for now, only be two widebody freighters to consider for new: 767 and 777.
https://www.boeing.com/commercial/marke ... t-outlook/

So the consensus isn't wrong per se, but a strict thesis of all used would be incorrect too. There is a hourly utilization per day where above that, buying new is cheaper. I don't have a link, but in general, flying a newer generation aircraft pays off at 9 hours per day or above, in my opinion.

So of 930 new freighters Boeing predicts, I could see 150 to 250 being 777xF. Since a 777xF would save the line, why wouldn't Boeing take this profitable option?

For example, 201 factory new 777F delivered, 41 in the backlog. But with a 777-300ERSF expected to be certified in 2 years, I expect new sales to slow down. Somehow Boeing still has a backlog of 44 ,767-300ERF new build freighters (188 delivered+tankers in backlog).

https://en.m.wikipedia.org/wiki/Boeing_777

https://en.m.wikipedia.org/wiki/Boeing_767

Then we can debate the other 1500 conversions. TPAC and Europe to Coastal China, Korea, Japan, and Singapore, even with a stop, should be new build. I'm only aware of a 777xF proposal for a current generation freighter.

I might be overall incredibly bearish, but I'm not hunkering down in a bunker. I look for opportunities as a big freighter with modern efficiency is needed.

Lightsaber
3 months without TV. The best decision of my life.
 
AngMoh
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Re: The case for more aircraft production cuts/playing chicken

Thu Jan 21, 2021 5:59 pm

Airbus is reducing A320 production rates from earlier announced numbers.

Output of the single-aisle A320 jet family increased from 40 a month to 43 in the third quarter and 45 in the last three months of 2021, Airbus said on Thursday, scaling back a previous July target rate of 47 "in response to the market environment."


https://www.channelnewsasia.com/news/bu ... k-14015032
727 732 733 734 735 73G 738 739/ER 742 743 744/M 752 753 762 772 77E 773 77W 788 A300 A310 A319 A320 A321 A332 A333 A343 A345 A346 A359 A35K A388 DC-9 DC-10 MD11 MD81 MD82 MD87 F70 ERJ145 E170 E175 E190 E195 ATR72 Q400 CRJ200 CRJ700 CRJ900 BAE146 RJ85
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 22, 2021 3:51 am

AngMoh wrote:
Airbus is reducing A320 production rates from earlier announced numbers.

Output of the single-aisle A320 jet family increased from 40 a month to 43 in the third quarter and 45 in the last three months of 2021, Airbus said on Thursday, scaling back a previous July target rate of 47 "in response to the market environment."


https://www.channelnewsasia.com/news/bu ... k-14015032

A220 production increasing! :hyper:

Assembly of the smaller A220 jet will increase from four to five aircraft per month at the end of the first quarter as previously announced, Airbus said.

And then I realize the A220 production rate is a rounding error in the grand scheme. :cry2:


At least it is enough to keep the supply chain viable.

As to Airbus scaling back from a rate of about 500/year, that makes sense. Aircraft financing must be tricky in these times.

Lightsaber
3 months without TV. The best decision of my life.
 
JonesNL
Posts: 279
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 22, 2021 12:27 pm

lightsaber wrote:
AngMoh wrote:
Airbus is reducing A320 production rates from earlier announced numbers.

Output of the single-aisle A320 jet family increased from 40 a month to 43 in the third quarter and 45 in the last three months of 2021, Airbus said on Thursday, scaling back a previous July target rate of 47 "in response to the market environment."


https://www.channelnewsasia.com/news/bu ... k-14015032

A220 production increasing! :hyper:

Assembly of the smaller A220 jet will increase from four to five aircraft per month at the end of the first quarter as previously announced, Airbus said.

And then I realize the A220 production rate is a rounding error in the grand scheme. :cry2:


At least it is enough to keep the supply chain viable.

As to Airbus scaling back from a rate of about 500/year, that makes sense. Aircraft financing must be tricky in these times.

Lightsaber


Depends on perspective: 25% production rate increase in this market is nothing short of an miracle...
 
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lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 22, 2021 2:22 pm

JonesNL wrote:
lightsaber wrote:
AngMoh wrote:
Airbus is reducing A320 production rates from earlier announced numbers.



https://www.channelnewsasia.com/news/bu ... k-14015032

A220 production increasing! :hyper:

Assembly of the smaller A220 jet will increase from four to five aircraft per month at the end of the first quarter as previously announced, Airbus said.

And then I realize the A220 production rate is a rounding error in the grand scheme. :cry2:


At least it is enough to keep the supply chain viable.

As to Airbus scaling back from a rate of about 500/year, that makes sense. Aircraft financing must be tricky in these times.

Lightsaber


Depends on perspective: 25% production rate increase in this market is nothing short of an miracle...

I'm very excited for the A220. However, I know it needs higher production rates to develop economics of scale.

Airbus not increasing A32x production by another ~42/year (due to delayed ramp up) will matter more to their cash flow than another 12 A220. Cest la vie.

I think the A220 has huge potential. Yet I will look at the overall market and express concern at over-production. I do think the next 7 years are THE opportunity for the A220 and E2. But as I expressed above, I believe reduced frequency flights of the more typical size ranges will be the norm during recovery. As Delta retires CR2s, I expect larger aircraft on a less than daily frequency to replace them.

It is an interesting market ahead.

Lightsaber
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 22, 2021 2:27 pm

So with the new Airbus production rate numbers I estimate they will build ~500 aircraft in 2021.
So actually less than in 2020, because Q1 2020 production was at 'normal' rate.
 
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Re: The case for more aircraft production cuts/playing chicken

Fri Jan 22, 2021 2:56 pm

What do you guys think the potential impact of carbon taxes in the USA will have the demand for new aircraft? Especially if there are tax incentives to go new? I think we are going to find out soon (first 100 days).
    300 319 320 321 707 717 720 727 72S 737 73S 734 735 73G 738 739 747 757 762 ARJ B11 C212 CRJ CR2 CR7 CR9 CV5 D8S DC9 D9S D94 D95 D10 DH8 DTO EMB EM2 E135 E145 E190 FH7 F28 F100 FTRIMTR HRN L10 L15 M80 M90 SF3 SWM YS11
     
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    Re: The case for more aircraft production cuts/playing chicken

    Fri Jan 22, 2021 4:10 pm

    CFRPwingALbody wrote:
    So with the new Airbus production rate numbers I estimate they will build ~500 aircraft in 2021.
    So actually less than in 2020, because Q1 2020 production was at 'normal' rate.

    But in 2020 around a whole quarter of the year was lost to COVID. Production was stopped in all FAL for around one month and after this, in following 4 to 6 month was slowly restarted. So around begin of Q4, the production was "back in line" with than reduced numbers.

    I say around the same number as in 2020, so more than 500? I think, even up to 600.
    Monthly production shall be now around 50 (little less) and will increase up to 55 or so per month. An Airbus year is around 10.5 to 11 month production time (if I remember correctly, 10.5 month for wb and 11 month for smallbodies).

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