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2014 Year in Review
Commercial Aerospace Outlook
Source: Open Sources, Boeing and Airbus Public Filings, Fairmont Consulting Group Analysis, Ascend Flight Global
Tailwinds:
2014 was a another record year for both Boeing and
Airbus with their combined backlogs growing 14% from 10,639 in
2013 to 12,175 at the close of 2014. Boeing once again retained its
status as world’s top planemaker, delivering 723 aircraft while
Airbus delivered 629. New orders continue to be driven primarily by
a growing global middle class, especially in the Asia-Pacific, and
new fuel-efficient aircraft options. Air travel demand remained
resilient despite the most recent Ebola outbreak, terrorist threats
and wars in the Middle East and Ukraine. Boeing forecasts
passenger traffic will grow more than 160% by 2033, at a
compound annual growth rate (CAGR) of 4.7%. Demand from
China is projected to pass the US market by 2030 helping to set
this cycle apart from previous cycles that were largely dominated
by orders from the US and Europe.
Airbus and Boeing Aircraft Deliveries and Production Plans
Headwinds:
One of the major issues is whether or not suppliers
can continue to keep pace and make the necessary investments to
support this unprecedented upcycle. With more than $1 trillion in
backlog, delivery rates are a key topic for suppliers and a driving
factor behind supply chain consolidation. As suppliers are adjusting
to meet OEM demand, the high fuel prices that helped boost
backlogs over last four years fell by 50% in Q4. This price swing is
driving up the value of aircraft in service at a time of rising near-
term demand and putting downward pressure on the premium
prices demanded by the newest Airbus and Boeing aircraft. If fuel
prices remain at current levels for a prolonged period, the current
production plans could be disrupted as fuel comprises roughly 30%
of airline costs. While investments in new-technology aircraft are
unlikely to stop, the pace and rationale will likely be affected.
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Airbus Deliveries / Production Plans
Boeing Deliveries / Production Plans