A320 deliveries ahead of NEO

There is a lot of speculation if deliveries of the "classic" A320 will fall in 2014-2015 in anticipation of the A320NEO. Both Boeing and Airbus meanwhile are talking about accelerating deliveries - Airbus is thinking about up to 44 aircraft a month, up from the current rate of 36 and the planned rate of 40 for next year. Boeing will also increase it's output rate of the B737 line to 40 per month.
One could argue that in the case of Airbus the rate hike will only last a year, before airlines will start to negotiate conversions for deliveries close to the NEO EIS from the "Classic" to the NEO. One argument that can be heard is that deliveries of the B737 Classic plummeted from 218 in 1992 to just 76 in 1996 - but the 737NG entered airline service in 1998 and in 1997 deliveries increased again. Please read this article from 1997. Even CFMI was suprised by the large number of orders for the CFM56-3, the engine of the 737 Classic.
I think tthe ups and down in aircraft production are more related to the world economy than to the appearance of new aircraft. If the economy is thriving, aircaft deliveries will do so, too - with a time delay of one or two years as the manufacturers and suppliers cannot ramp up and down their production in days.
You can see the relationship in the chart I put together. It shows narrowbody deliveries from Boeing (B737 family) and Airbus (A320, family; sorry, I did not implement the B717 nor the B757). Then I looked up the world GDP growth rates. What you can see is that dips in deliveries always come after the GDP growth has had a low.
1. Through 1991 and 1993 world GDP growth was flat at 2%. Deliveries subsequently fell from around 350 to less than 150 in 1995 and 1996. GDP growth recovered starting in 1994 and stayed reached a high of almost 5% in 2000 with a small dent in 1998 due to the asian crisis. Deliveries soared to around 550 per year between 1999 and 2001. The boom came to a sudden stop due to 9/11.
2. In 2001 the internet bubble burst from 2000 reached the ecomomy. The economic crisis was sharpened by 9/11, leading to a lack of new orders for aircraft (apart from Ryanir). Deliveries fell back to a low of around 400 in 2003 before bouncing back, as the global economy recovered starting in 2003 with growth rates exceeding 5% in 2006.

Many "experts" thought that as a consequence to the financial and economic crisis starting with the Lehman Brothers bankruptcy aircraft deliveries would have to fall at least as dramatically as after 9/11. But this time  neither Airbus nor Boeing were forced to cut delivery rates of their narrowbody families. The reason is that, different than during the 90's of early 2000's, the emerging economies, especially in Asia are now a much more powerful part of the global economy and air traffic was growing in these countries even in 2008 and 2009.

It will depend on the world economy if delivery rates for the A320 Classic will dramatically fall in 2014 and 2015. But as in Asia air traffic is still growing and will do so for many years, I believe that even a small dip in the world GDP growth would not harm the A320 Classic deliveries too much. There are too many carriers like Tiger Airways, Jetstar, AirAsia, who need aircraft badly to satisfy demand.


Boeing creating a new market?

Air Transport World today reports that Buckingham Research expects Boeing to forego reengining the 737NG, a move still anticipated by a "meaningful number of investors" in the case that a Boeing customer would defect to Airbus.
But Buckingham noted that Boeing might be so capacity constrained in terms of orders that it might not have the possibility to reengine.
Instead of reengining Boeing would move to an all new aircraft, probably a new light twin-aisle. As I laid out before, such an aircraft would not make sense starting in the current lower capacity end of the 737, so I would guess (if true) that this aircraft would start where the 737-800 is today. The upper end then could be where the  757-300 is, just below the 787-8. That would then fill a niche, because today there are no new aircraft build in this segment - well, one could consider the Tu-204, but this aircraft is almost dead and even not competitive with the 757.
Buckingham says that Boeing would continue to improve the 737NG and is internally convinced that the 2016 737NG is competitive with the A320neo. Boeing earlier stated that the 737NG line could be open until 2026.
A move described by Buckingham would be both smart and risky:
  • Risky as it is not clear if customers really will think that a more than 40 year old design will be competitive. Until then the CSeries is in the market, a similar Embraer aircraft could be on the way to the market, making the 737-700 obsolete - the backlog of the -700 is shrinking anyway (as well as the A319). The cabin diameter will still be the 737's problem, as people tend to get larger - vertically, but even worse: horizontally.
  • Smart as it opens a new market field for Boeing and by that getting out of the competition with Bombardier, Embraer, the Chinese, the Russians and, to some extent, Airbus. Although for now it remains unclear if the new aircraft will have transcontinental or transatlantic range, the aircraft could be (with the right level of technology) better than the A321neo even if it is designed for more range to enable all 757 missions flown today.
But is there a huge market for these aircraft? At the lower end for sure, as the 737-800 shows - but there would be the problem. If I have two aircraft in my shop, which one should I sell the customer. The same problem appeared when Boeing bought McDonnell Douglas and the MD-95 became the B717. The B717 had to die, as it was a stand-alone aircraft, not part of a family - Boeing sold the 737-600 to SAS although the B717 would have been much better in costs for the SAS missions.
And what about Southwest, by far the largest Boeing customer today? They just ordered the 737-800, but all of their other (500+) aircraft have less than 150 seats and they also like the B717 as an addition with even lower capacity. I cannot imagine Southwest going to an all 180+ seater fleet in the future just to keep being a Boeing customer. And I cannot imagine that incremental improvements to the 737-700 are enough to keep them from defecting to Bombardier (they might one day decide to build a CS500, although saying differently, Embraer or even Airbus.
There were "just" about 757's build - for sure Boeing counts on creating a new big market segment when they really build that small twin-aisle. The question is, if that market segment will be there when the aircraft appears...