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[FONT=Tahoma, Verdana, Lucida]Highlights: Global Fleet Forecast [/FONT]
[FONT=Tahoma, Verdana, Lucida]Projected Demand Up 20% From Last Year.[/FONT][FONT=Tahoma, Verdana, Lucida] RJs Going To Scrap, Fast.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Consolidation: No Effect on Demand. [/FONT][FONT=Tahoma, Verdana, Lucida]Dark Horse Hottest Airliner: A-350.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Capacity Demand Blur...[/FONT][FONT=Tahoma, Verdana, Lucida]And Other Heresies[/FONT]
[FONT=Tahoma, Verdana, Lucida]Projected Demand Up 20% From Last Year.[/FONT][FONT=Tahoma, Verdana, Lucida] RJs Going To Scrap, Fast.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Consolidation: No Effect on Demand. [/FONT][FONT=Tahoma, Verdana, Lucida]Dark Horse Hottest Airliner: A-350.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Capacity Demand Blur...[/FONT][FONT=Tahoma, Verdana, Lucida]And Other Heresies[/FONT]
[FONT=Tahoma, Verdana, Lucida]The Boyd Group has now published its annual Global Fleet Demand & Trend Forecast for 2008 - 2017. The research has turned up some interesting conclusions..[/FONT]
[FONT=Tahoma, Verdana, Lucida]Airframe Manufacturers - Land Office Business.[/FONT][FONT=Tahoma, Verdana, Lucida] Manufacturers and their suppliers are probably in the best market position since WW II, with a global demand for over 14,100 new jet airliners through 2017. That is significantly higher - by almost 20% - than market forces indicated a year ago. Thank OPEC.[/FONT]
[FONT=Tahoma, Verdana, Lucida]One main reason is that 55% of these new airliners will be directly the result of faster-than-expected retirement of existing units, a dynamic that's being accelerated by the now-accepted realization that jet-A isn't going to be getting any cheaper. So fuel efficiency is the goal, at least if airlines want to stay in business.[/FONT]
Global Demand: More Evenly Spread Out. China is expected to comprise over 18% of total airliner demand, although this may be modified by "encouragements" of Chinese carriers to favor some of the initial indigenous models, such as the ARJ-21. [FONT=Tahoma, Verdana, Lucida]Airframe Manufacturers - Land Office Business.[/FONT][FONT=Tahoma, Verdana, Lucida] Manufacturers and their suppliers are probably in the best market position since WW II, with a global demand for over 14,100 new jet airliners through 2017. That is significantly higher - by almost 20% - than market forces indicated a year ago. Thank OPEC.[/FONT]
[FONT=Tahoma, Verdana, Lucida]One main reason is that 55% of these new airliners will be directly the result of faster-than-expected retirement of existing units, a dynamic that's being accelerated by the now-accepted realization that jet-A isn't going to be getting any cheaper. So fuel efficiency is the goal, at least if airlines want to stay in business.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Airline Consolidation - Little Effect On Demand.[/FONT][FONT=Tahoma, Verdana, Lucida] Regardless of whatever carrier combinations come along, they won't change two fundamental demand drivers in the US airline industry. The first is the need to replace older fleets.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Now that oil is likely to stay at $90 or above, lower and/or no ownership costs get offset fast. Merger or no merger, new fleets are an imperative.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Secondly, the 90 to 125 seat capacity gap is a glaring need in some carriers' fleets. (Sidebar: Given the temperature at labor, particularly in light of employee disruptions that mergers cause, it's a snowball's chance in 'Lauderdale that unions will allow these airliners to be operated outside of the major itself.)[/FONT]
[FONT=Tahoma, Verdana, Lucida]RJ Fleets.[/FONT][FONT=Tahoma, Verdana, Lucida] Not a good horizon for regional jets. Unlike other forecasts, the Global Fleet Demand recognizes that "regional jet" is NOT defined by number of seats, but represents a specific genre of aircraft, a specific genre of operator, and a specific market role. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The specific aircraft are ERJ and CRJ series (give or take any FRJs that may be left). Their cabins, ergonomics and operating envelopes are not the same as mainline airliners, including E-Jets and smaller versions of 737s and the A-318, regardless of any similarity in seating capacity.[/FONT]
[FONT=Tahoma, Verdana, Lucida][FONT=Tahoma, Verdana, Lucida]The specific operators are small jet providers (SJPs), what are commonly still called "regional airlines" - despite the fact they're neither regional nor airlines. They are the entities that operate RJs, and they're in the specific business of leasing these small units of lift to major carrier customers. It is only within this context - this specific sector of aviation - that RJs operate. It is one that is clear, and distinct, and for accuracy must be distinctly forecasted.[/FONT]
[FONT=Tahoma, Verdana, Lucida]The fact is that all of these genres are in a declining demand mode. Fuel prices and other cost issues are making smaller RJs aircraftia non-grata in many previously profitable mission applications. This means the SJPs are facing declining demand for their services, because their major airline customers need fewer of these jets. [/FONT]
[FONT=Tahoma, Verdana, Lucida]Result: The RJ fleets in the US will drop by over 800 units in the next ten years. Note that this figure includes the over 270 new CRJ-900/1000s that are forecast to enter US service to replace some -200s. So we're looking at a lot of RJ retirements, and ultimately, scrapping, because there is no apparent secondary market for these airliners, at least not in such volume. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The [/FONT][FONT=Tahoma, Verdana, Lucida]Global Fleet Demand & Trend Forecast[/FONT][FONT=Tahoma, Verdana, Lucida] points out that even though these retirements ostensibly represent a market need for a breakthrough-technology second-generation <70 seat jet program, there simply is no such thing on the horizon. This is much like the fact that there was no follow-on to the hundreds of now-retired 19-seaters that used to ply the skies 20 years ago. It's a function of airframe R&D costs and changing airline operating economics. So, forecasts in some sectors that are predicting 3,000 or more new <70 seat jets sound nice, but they're not consistent with reality. It's hard to satisfy demand if nobody builds the airplane in the first place.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Eight years ago, The Boyd Group's public forecasts and client projects were alone in pointing out that there were more combined RJs on order, on option, and in operation than the industry could absorb. In short, a fleet glut. Consensus forecasts sneered to the contrary, predicting a nearly unending demand for these small jets. That's what sets The Boyd Group apart - we recognize that when you're in "the consensus" you're looking for agreement, not looking to the future.[/FONT]
[FONT=Tahoma, Verdana, Lucida]A-350. Hot Prospect.[/FONT][FONT=Tahoma, Verdana, Lucida] The A-350 has been viewed as a scramble by Airbus to belatedly catch the Boeing 787. That may have been the case originally. [/FONT]
[FONT=Tahoma, Verdana, Lucida]But now, the enormous orderbook success of the 787 is positioning the A-350 as the airliner to beat in in the middle part of the next decade. Carriers are finding that the 787 is so backlogged that the A-350 can be ready at about when the Boeing orderbook will provide a production slot, yet it will be a second-generation composite airplane, with very likely better economics, the Gods of Aerodynamics and Engine Development willing. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The A-350 will also be coming out of the factory right when early B-777s are coming off lease. These customers are a jump ball for Airbus and the -350.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Independent Forecasts Relied Upon By Aviation Leaders. [/FONT][FONT=Tahoma, Verdana, Lucida]The Boyd Group Global Fleet Demand & Trend Forecast is produced entirely in-house, without any support or input from manufacturers or suppliers. Since we don't produce airplanes, the data is completely independent, and presented as-is, where is. [/FONT]
[FONT=Tahoma, Verdana, Lucida]For more information on The Boyd Group Global Fleet Demand & Trend Forecast, and to download a copy of the Table of Contents, click here. The document can be securely ordered on-line as well. (And we now accept American Express as well as Visa and Master Card.)[/FONT]
[FONT=Tahoma, Verdana, Lucida]Now that oil is likely to stay at $90 or above, lower and/or no ownership costs get offset fast. Merger or no merger, new fleets are an imperative.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Secondly, the 90 to 125 seat capacity gap is a glaring need in some carriers' fleets. (Sidebar: Given the temperature at labor, particularly in light of employee disruptions that mergers cause, it's a snowball's chance in 'Lauderdale that unions will allow these airliners to be operated outside of the major itself.)[/FONT]
[FONT=Tahoma, Verdana, Lucida]RJ Fleets.[/FONT][FONT=Tahoma, Verdana, Lucida] Not a good horizon for regional jets. Unlike other forecasts, the Global Fleet Demand recognizes that "regional jet" is NOT defined by number of seats, but represents a specific genre of aircraft, a specific genre of operator, and a specific market role. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The specific aircraft are ERJ and CRJ series (give or take any FRJs that may be left). Their cabins, ergonomics and operating envelopes are not the same as mainline airliners, including E-Jets and smaller versions of 737s and the A-318, regardless of any similarity in seating capacity.[/FONT]
[FONT=Tahoma, Verdana, Lucida][FONT=Tahoma, Verdana, Lucida]The specific operators are small jet providers (SJPs), what are commonly still called "regional airlines" - despite the fact they're neither regional nor airlines. They are the entities that operate RJs, and they're in the specific business of leasing these small units of lift to major carrier customers. It is only within this context - this specific sector of aviation - that RJs operate. It is one that is clear, and distinct, and for accuracy must be distinctly forecasted.[/FONT]
[FONT=Tahoma, Verdana, Lucida]The fact is that all of these genres are in a declining demand mode. Fuel prices and other cost issues are making smaller RJs aircraftia non-grata in many previously profitable mission applications. This means the SJPs are facing declining demand for their services, because their major airline customers need fewer of these jets. [/FONT]
[FONT=Tahoma, Verdana, Lucida]Result: The RJ fleets in the US will drop by over 800 units in the next ten years. Note that this figure includes the over 270 new CRJ-900/1000s that are forecast to enter US service to replace some -200s. So we're looking at a lot of RJ retirements, and ultimately, scrapping, because there is no apparent secondary market for these airliners, at least not in such volume. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The [/FONT][FONT=Tahoma, Verdana, Lucida]Global Fleet Demand & Trend Forecast[/FONT][FONT=Tahoma, Verdana, Lucida] points out that even though these retirements ostensibly represent a market need for a breakthrough-technology second-generation <70 seat jet program, there simply is no such thing on the horizon. This is much like the fact that there was no follow-on to the hundreds of now-retired 19-seaters that used to ply the skies 20 years ago. It's a function of airframe R&D costs and changing airline operating economics. So, forecasts in some sectors that are predicting 3,000 or more new <70 seat jets sound nice, but they're not consistent with reality. It's hard to satisfy demand if nobody builds the airplane in the first place.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Eight years ago, The Boyd Group's public forecasts and client projects were alone in pointing out that there were more combined RJs on order, on option, and in operation than the industry could absorb. In short, a fleet glut. Consensus forecasts sneered to the contrary, predicting a nearly unending demand for these small jets. That's what sets The Boyd Group apart - we recognize that when you're in "the consensus" you're looking for agreement, not looking to the future.[/FONT]
[FONT=Tahoma, Verdana, Lucida]A-350. Hot Prospect.[/FONT][FONT=Tahoma, Verdana, Lucida] The A-350 has been viewed as a scramble by Airbus to belatedly catch the Boeing 787. That may have been the case originally. [/FONT]
[FONT=Tahoma, Verdana, Lucida]But now, the enormous orderbook success of the 787 is positioning the A-350 as the airliner to beat in in the middle part of the next decade. Carriers are finding that the 787 is so backlogged that the A-350 can be ready at about when the Boeing orderbook will provide a production slot, yet it will be a second-generation composite airplane, with very likely better economics, the Gods of Aerodynamics and Engine Development willing. [/FONT]
[FONT=Tahoma, Verdana, Lucida]The A-350 will also be coming out of the factory right when early B-777s are coming off lease. These customers are a jump ball for Airbus and the -350.[/FONT]
[FONT=Tahoma, Verdana, Lucida]Independent Forecasts Relied Upon By Aviation Leaders. [/FONT][FONT=Tahoma, Verdana, Lucida]The Boyd Group Global Fleet Demand & Trend Forecast is produced entirely in-house, without any support or input from manufacturers or suppliers. Since we don't produce airplanes, the data is completely independent, and presented as-is, where is. [/FONT]
[FONT=Tahoma, Verdana, Lucida]For more information on The Boyd Group Global Fleet Demand & Trend Forecast, and to download a copy of the Table of Contents, click here. The document can be securely ordered on-line as well. (And we now accept American Express as well as Visa and Master Card.)[/FONT]
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