ANALYSIS: Why size matters on re-engined narrowbodies

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Qatar Airways’s decision to convert its order for six Airbus A319neo twinjets to the larger A320neo variant has further eroded the backlog for the smallest member of the re-engined narrowbody family.

The conversion was confirmed by the airframer’s latest order and delivery data, covering November 2013. It means that the orderbook for the A319neo now stands at 39 aircraft from two customers.

AviancaTaca disclosed in a corporate presentation earlier this year that it has 19 on order, while Republic Airways has 20.

Qatar Airways had signed for six A319neos in November 2011 as part of a deal for 50 of the re-engined A320 family, including 30 A320neo and 14 A321neo jets.

Although Airbus has pitched the A319neo as a robust competitor to the 110- to 130-seat Bombardier CSeries, the re-engined Airbus jet has not sold as well as its predecessor.

Its sales are also dwarfed by the those of the A320neo and A321neo which have racked up commitments for a combined total of 2,484 aircraft.

It is a similar story at Boeing, too. Only two carriers – WestJet and Southwest Airlines – have plumped for the 737 Max 7, the smallest of its revamped twinjet range, for a total of 55 jets. Meanwhile the larger Max family members have picked up 1,584 orders.

For Canadian airframer though, the picture is beginning to look a little more rosy. While sales of the CSeries have been gradual, the aircraft has picked up 182 firm orders from a range of customers.

Chris Seymour, senior analyst at Flightglobal’s consultancy arm Ascend says the comparative weakness seen in the A319neo and 737 Max 7 backlogs is “no real surprise”.

“We think the larger variants will take the lion’s share of the orders,” he says, as airlines look to upgauge.

He believes the Bombardier has been able to leverage the fact that the CSeries, particularly the larger CS330, is optimised for the segment.

Flightglobal’s Fleet Forecast for the period to 2032, envisages the CS300 taking around 75% of the market for 125-seat narrowbodies, with Airbus and Boeing the rest. However, that segment represents just 10% of the overall demand for single-aisle jets of 21,350 aircraft.

“I think Boeing and Airbus are well aware of the competitive situation,” says Seymour. “The reality is that the biggest market is for the larger aircraft.”

It’s a view shared by Richard Aboulafia, vice-president of analysis at Washington-based Teal Group. “Everyone upgauges in times of high fuel,” he says, “it’s exactly what we’d expect.”

And although the sales of the A319neo and 737 Max 7 have so far been relatively sluggish, Aboulafia thinks that as long as the airframers are producing around 30 of each model per year “there’s no reason to kill them”.

However, he is less bullish on the prospects for the CSeries, noting that the heavy discounting by the big two is “serving to keep the CSeries in a very tight spot”.