Chart of the Month – April 2015

Chart of the Month will be a recurrent feature of AVITAS.com.  Each month, we will produce a Chart that will provide some insight and data into industry developments and trends.

This time, the Chart summarizes, across a time series, the number of commercial aircraft that are in the order book (yet to be delivered).  This is an important metric that illustrates the demand for aircraft and determines the production levels of major OEMs.

The order book has reached unprecedented highs led by orders for narrowbody aircraft, specifically the Airbus neo family and the Boeing MAX family.  The narrowbody order book is trumping demand for both widebody and regional jet aircraft.  The reasons for these orders are many; major among them are:

Major re-fleeting worldwide to replace aging aircraft;
Airlines are hedging against fuel price by ordering more fuel-efficient aircraft;
Overall passenger growth is demanding more aircraft.

In general, single aisle aircraft tend to work well in major airline hubs and larger narrowbody airplanes like the A320 ceo and neo and the 737-800 and 737-8 MAX are favorites of low cost airlines like Southwest Airlines, Ryanair, easyjet, Lion Air, and AirAsia.

With the big run up of orders, one is compelled to ask: Is there a Bubble in aircraft orders?  We will be providing some insights into that topic in some future posts.