MAX KINGSLEY-JONES / LONDON
With US airlines accounting for 40% of orders worldwide, the aircraft manufacturers have taken a direct hit
At the beginning of last month - 11 days before the terrorist strikes on New York and Washington DC - there were around 4,570 jet aircraft firm orders worldwide, of which 40% (1,800 aircraft) were held by US carriers.
According to the Airclaims CASE database, over 1,550 of those 4,570 aircraft are due to be built and delivered by the end of next year, and again the bulk (760 aircraft) were due to enter service with US carriers (Flight International 25 September-1 October).
While the effects of the passenger traffic crisis resulting from the terrorist actions are being felt worldwide, US carriers have obviously borne the brunt of the collapse with loads down by 60%, according to Delta Air Lines. The US airlines have moved to cut up to 20% of their capacity. While some of this can be absorbed by retiring older aircraft, there seems little doubt a significant number of the 750 new aircraft due for delivery over the next 15 months will be delayed, deferred or cancelled.
As the accompanying tables illustrate, 141 Airbus/Boeing aircraft and 65 regional jets are due to be delivered into the US market this year (since 1 September), and a further 312 and 241 respectively next year. The most exposed manufacturer is Boeing, with over 280 orders from US carriers due for delivery by the end of next year.
All the major US airlines have Airbus and/or Boeing aircraft on order, with American Airlines topping the list with over 60 aircraft (all Boeings) due by the end of next year. Delta has the lowest exposure with 22 due up to December 2002.
Details of actual deferrals are still sketchy, but Southwest Airlines has delayed five Boeing 737s due soon but is yet to decide about the aircraft on order for later this year and next. Midwest Express, which has commitments for Boeing 717s and ERJ-140s, has pushed all new aircraft deliveries back by six to nine months.
Boeing has announced plans to scale back output next year by 20% to around 400 units, while Airbus is standing firm and just holding back on its ramp-up rather than slashing production rates.
"We believe that aircraft for which the metal has already been cut will be delivered, albeit that financing maybe more difficult. This could mean that the capital arms of the manufacturers will have a greater role to play in the short term," says Les Weal, chief analyst at UK-based consultants Airclaims. "If not, then they will have to be deferred. Airlines are likely to dump older, less efficient aircraft or 'orphaned' fleets to accommodate the new aircraft they have on order," he adds.
This forecast has already been borne out by US Airways, which has 34 Airbuses due in the next 15 months. The carrier plans to retire 111 aircraft in the short term, with its entire fleet of 737-200s, Fokker 100s and Boeing MD-80s being grounded by April. Continental and Northwest are also grounding old generation aircraft.
The regional arms of the US majors have large-scale commitments to Bombardier and Embraer regional jets as they continue the strategy of moving to predominantly jet fleets.
Bombardier is in a similar position to Boeing, albeit in the regional sector. The Canadian manufacturer is the most exposed with 151 handovers due in 2001 and 2002, and has already lowered its 2001 delivery target. Continental Express tops the list with 56 Embraer ERJs due over the next 15 months.
"For the regional jets it could be argued that they will be the right size for the lower levels of demand that is inevitable, especially in the USA, so we expect the majority on order will be delivered," says Weal.
Some observers believe that the sudden and dramatic fall-off in traffic, however, may mean that even these moves could do little to allay the pain that is going to be felt by manufacturers, vendors, suppliers and leasing companies in the coming months.
Source: Flight International
