Airlines will have to operate aircraft beyond their typical operational lifespans
Speaking at the Airline Economics Dublin event, Mr Udvar-Hazy said that while global passenger traffic will see solid growth in coming years, production backlogs at the top two aircraft-makers have reached record levels.
He pointed out that in 2010, there was a seven-year backlog for commercial aircraft orders at Boeing and Airbus, when a total of more than 6,000 narrowbody and widebody jets were on order.
By last year, he said the backlog had reached 11 years, with a total of more than 15,000 jets on order. The Airbus A321 and Boeing’s 737 Max jets have the biggest order backlogs, with a total of more than 10,000 between them.
However, the leasing veteran said aircraft deliveries from the pair still have not exceeded 2018 levels. That year, a total of 1,606 commercial jet aircraft were delivered by the pair.
Last year, the number was 1,393. Of those last year, 790 were made by Airbus.
News in 90 seconds – Tuesday 27th January
Mr Udvar-Hazy added that both Airbus and Boeing have been unable to meet their own production targets. “What this really means is that we’ve lost about 3,000 airplanes since 2018 that should have been produced,” he added.
He said that technical problems including with Roll-Royce Trent engines, the CFM Leap engines and Pratt & Whitney GTF engines, have compounded the issue.
“Not only don’t we have these 3,000 aircraft that would have been built… we also have anywhere from 800 to 1,000 aircraft that are not operational because they don’t have engines,” he added. “The problem is almost [a] 4,000-aircraft gap.”
Airlines have no choice but to continue to operate older 737s, older 767s, older A330s and so on
He thinks that the typical 25-year life for modern aircraft will now have to be extended by aircraft operators in order to plug the gap in supply. That means aircraft could be flying in commercial service when they are more than 30 years old.
“Airlines have no choice but to continue to operate older 737s, older 767s, older A330s and so on,” he added.
Supply issues have severely hampered production, with a shortage of everything from engines and avionics systems to first and business-class seats impacting aircraft manufacturing. Not only is the lack of supply having an impact, but so too is certification. Coupled with increased regulatory oversight intervention, targets are harder to hit.
“The increased regulatory oversight… has just become more difficult, more frustrating – not just for the OEMs [original equipment manufacturers, including Boeing and Airbus], but also for the airlines,” Mr Udvar-Hazy said.
He conceded that both Boeing and Airbus have put a “tremendous amount of resources” and investment into identifying where they had production gaps with subcontractors and parts providers.
The leasing executive said that Airbus was unable to reach its own production target last year, and that the planemaker’s current target of making 75 single-aisle neo aircraft per month appears “really difficult to achieve right now”.
Targeted monthly production rates for both Airbus and Boeing remain “distant objectives”, he added.
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