Airline Business asked carriers what they thought is holding Airbus and Boeing back in launching a new narrowbody generation. Nearly all of the 22 carriers which responded to the survey cited the record number of outstanding orders for A320s and 737s as a disincentive. Airbus currently has a huge backlog of more than 2,000 A320s while Boeing has a backlog of over 1,500 737s.

Most carriers also said the manufacturers lack the resources to launch a new narrowbody because their capital and manpower is currently tied up with new widebody programmes. Most also cited technology, claiming there has not yet been a sufficient leap in technology to generate the 15% efficiency improvement which they think would be required to make investing in the development of a new aircraft worthwhile.

Here are some of the comments:

  • TAP Portugal chief executive Fernando Pinto: "These planes are selling very well. It's very hard to touch such a good product that sells so well. Airbus and Boeing are both involved in other investments. A new project won't happen before 2015 for sure."
  • Clickair chief executive Alex Cruz: "There is no competitive pressure. There are two suppliers in the marketplace with strongholds. There is no need to change for now. Both manufacturers are busy with their problems and their new widebody projects."
  • Aeromexico chief executive Andres Conesa: "The cycle of the industry is in [the manufacturers] favour. They are expecting that the major US operators put in big orders to renew their fleets and they are expecting to confirm that the new technology used for the 787 is for real [before they] apply it on the design of the new generation narrowbody."
  • EasyJet chief executive Andrew Harrison: "Work is needed to research and validate the new architecture and technologies that will deliver a step change in environmental performance, which requires engineering capacity in the next three years. The manufacturers will also need to do significant work to ensure these technologies can be industrialised to meet the monthly production rates that will be demanded of new generation aircraft."
  • Japan Airlines managing director Fumio Tsuchiya: "A320s and 737s are still the best selling airplanes and Airbus and Boeing are not in a hurry due to high demand of engineering resources for the development of medium-size airplanes, such as the A350 XWB or 787."
  • Aegean Airline chief operating officer Antonis Simigdalas: "[Manufacturers] wish to amortise research and development and initial production overhead costs over the largest possible aircraft population before investing full ahead in a new generation."
  • Kingfisher executive vice-president Hitesh Patel: "Would you want to invest in a new narrowbody when your order book is completely full?"
  • US Airways vice-president financial analysis Dion Flannery: "Why take on additional risk when you are confident there will be more orders?"
  • Mexicana executive vice-president corporate planning and fleet transitions Ricardo Baston: "I guess manufacturers are reluctant to stop production of an aircraft that has been fully amortised and for which demand is at its historical peak. They need the cash to fund other programmes. Each of them has its own motive and incentives to pursue this programme at a later stage."
  • Air New Zealand general manager strategic development Nathan Agnew: "Boeing and Airbus are commercial enterprises and react to market signals - both supply and demand signals. On the demand side the current generations are selling well, and to be honest are good products. On the supply side Airbus doesn't seem to have the capacity either financially or the people, to commit until its widebody lines are running smoothly.
  • AirAsia contracts and development manager Anaz Ahmad Tajuddin: "The market for the current narrowbody is maturing and these aircraft are serving the airlines' needs well, hence the manufacturers are not in a rush to launch new generation aircraft. Another point is that new engines are still in the development stages. As and when the new engine is introduced the launch of the new generation will fall into place."


Source: Airline Business