European plane maker Airbus has experienced a rise in demand for its A320neo passenger jet, which has led the company to update its sales forecast for the aircraft. The company expects to produce up to 70 units a month over 20 years. Picture: REUTERS
European plane maker Airbus has experienced a rise in demand for its A320neo passenger jet, which has led the company to update its sales forecast for the aircraft. The company expects to produce up to 70 units a month over 20 years. Picture: REUTERS

London — Airbus has raised its forecast for aircraft demand over the next 20 years as the company begins to recover from two years of late deliveries of its A320neo passenger jet.

Aircraft demand has been driven mainly by strong economic growth in emerging markets as well as the need to replace older planes in mature western markets.

Also on Friday, Airbus confirmed it was studying further development of the largest member of the A320 family. In June, Airbus said it was considering an A320 plane with a longer range to head off a potential Boeing mid-market rival.

The European plane maker said it was raising its 20-year forecast for total aircraft deliveries by more than 7% to 37,400 jets, worth $5.8-trillion.

That compares with 34,900 aircraft worth $5.3-trillion a year ago, partly as the result of a higher starting point as the industry absorbs another year of brisk growth in air travel.

Booming 'small' jet demand

Dominating the outlook is the market for "small" jets of up to 230 seats, where Airbus has expanded its portfolio by closing a deal to buy Bombardier’s 110-to 130-seat CSeries jet, which was mirrored on Thursday by a tentative deal by rival Boeing to acquire the commercial unit of Brazil’s Embraer.

These will represent 28,550 deliveries worth $3.2-trillion, or 76% of all units delivered over the next 20 years, Airbus said in its annual forecast.

Airbus has been hit by delivery delays of single-aisle planes due to engine shortages, but the company’s plane-making chief said it was over the worst, with a log jam of 100 undelivered jets dipping to 86 by end-June.

The company is looking at increasing already record production plans for the jets to 70 a month from a 2019 goal of 60 due to strong demand, but has not made any decision, Guillaume Faury said.

Its new forecasts redrew the traditional distinction between single-aisle or narrow-body jets and twin-aisle aircraft, and between the various types of long-distance aircraft. The changes are particularly evident for the largest planes. Instead of singling out jets with 450 or more seats, which effectively means the four-engined Boeing 747 and Airbus A380, Airbus now places all planes with 350 or more seats — including the biggest twin jets — in one box called "extra large".

The company says it believes 1,590 of these will be delivered over two decades. Other categories include "medium", between 230 and 300 seats, and "large", from 300 to 350 seats.

Airbus has been fighting a statistical battle for years with Boeing over demand for very large jumbos such as the 747 and the A380, where it has been more bullish than its US rival.

Boeing says large twin jets like its 777X will soak up most of this demand and has abandoned forecasting the largest models.

The new Airbus framework ignores the number of engines and focuses on bands of seating, reflecting a view that the same market can be served in different ways, chief commercial officer Eric Schulz said.

Airbus said the new methodology was based on the way airlines use their planes rather than the type flown, spurred in some cases by shifting business models. But the move is unlikely to temper debate over the future of the slow-selling A380.

Boeing, which is due to update its 20-year forecast later in July, in 2017 predicted total deliveries of 41,030 jets worth $6.1-trillion. Both firms say most new deliveries will permit growth in airline fleets rather than simply replacing old jets.

Speaking a week before the Farnborough Airshow, Airbus officials hinted at sales of the A330neo, which has been hard to shift in the face of competition from the Boeing 787 recently, and of the soon-to-be-renamed Bombardier CSeries.

Reuters