B737NG and A320ceo backlog

Scott Hamilton posted a story last week commenting on the backlog situation of the B737NG. He Comes to the conclusion that there is a rather large gap and Boeing would need more than 350 more orders to fill the production until the B737MAX takes over in full.

How large the gap is depends on when exactly EIS of the B737MAX will be and how fast Boeing (and the suppliers) can ramp up production:

1. EIS: just last week Alaska Airlines announced that they will get their first B737MAX in late 2017 rather than in 2018, six months after Southwest got their first aircraft. So Boeing seems to be a little bit ahead of schedule and EIS would be in the first half of 2017. Until now I placed EIS in August 2017.

2. Ramp up: based on that Boeing once said that B737NG production will end in 2019 (sorry, I can’t find the source anymore), I placed a very steep ramp up in the calculation, leaving only about 60 B737NG deliveries in 2019. I know that this is very optimistic (not to say unrealistic).

Just before I wrote may last post on that matter Delta announced a conditional order for 40 more 737-900ER. As the Delta pilots did not ratify the new contract, this order now fell through. I could imagine that this order will come back once the dispute with the pilots is resolved, but for now these 40 aircraft are out of the equation.
Also, there have been some more NG to MAX conversions lately, from SilkAir for 6 aircraft and another, undisclosed customer, for two. Virgin Australia also announced a conversion for 16 NG's, which is not in the books already. UTAir deferred their outstanding order for 34 NG's indefinitely.
Last week Boeing Jet2.com announced a deal for 27 B737-800NG. As I know that they were also looking for B737MAX and A320neo I guess Jet2.com took advantage of a) early delivery slots and b) favorable pricing.
With all that my gap for the B737NG is now at about 100 aircraft. But due to situation of the undisclosed customers and the uncertainties surrounding the ramp-up it could be also substantially larger.

There is another post regarding the oversold situation at Airbus for the A320ceo and here is my update from the situation in June:

No really a lot changed - there is an order for 8 A320ceo from an undisclosed customer in August.
At August 31, 2015 there are 1246 open orders for the A320ceo line.
I expect cancellations from
  • Kingfisher (67)
  • South African Airways (10)
  • Alphastream (15)
  • Czech (7, conversion to A32neo)
  • Wizz (10, conversion to A321neo)
  • Croatia (4)
  • Hamburg International (2)
  • B&H (2)
  • Mexicana (4)
  • Yemenia (4)
  • Nile Air (2)
Then I would put all Russian orders at risk:
  • Aeroflot [AIG&IAIT] (38)
  • S7 (23)
  • UTAir (8)
  • Ural (7)
All in all this could mean 203 cancellations, 76 of these from Russia.
Still, Airbus would be overbooked by about 100 aircraft.

1 comment:

  1. It seems that Airbus has a nice problem at hand. If the customers cancel, they would not loose anything since they would probably won't have the available spot to build these planes. But what if most of these customers want their planes at the accord upon delivery dates and Airbus does not have the spot to build it, will they pay the customers a non deliverable penalty or delayed aircraft penalty?