Following yesterday’s release of the International Civil Aviation Organization’s (ICAO) air travel forecast projecting a 1.2 billion travellers drop and US$160bn to US$253bn in revenue losses for the air travel industry in 2020 both Boeing and Airbus are facing major issues says Nicolas Jouan, Aerospace and Defense Analyst at GlobalData.
According to Jouan, the hardest hit regions are set to be Europe, Asia-Pacific and North America, with air travel set to disappear almost entirely in 2020. The analyst says this projection is “deeply problematic” for Boeing and Airbus and will likely result in more order cancellations.
“Boeing and Airbus have already seen multiple cancelations from airlines and leasing companies in 2020 so far. However, it would be wrong to reduce everything to COVID-19 as some more fundamental issues of the commercial aviation industry are also at play,” said Jouan.
“Boeing has made unfortunate headlines with massive cancelations of B737 orders this year. While some cancelations have been connected to COVID-19 and the slowdown of activity - for example Avolon announcing 75 B737 cancelations at the beginning of April - other cancelations such as Air Lease Corporation’s or Air Canada’s earlier this year, could be explained by wider-scale strategic decision to slim order books in front of a pre-COVID-19 slowdown of the Asian market,” he added.
According to Jouan Boeing MAX issues are not simply related to the crashes and subsequent wait for recertification but other issues such as the low oil price reducing the attractiveness of fuel efficient single aisle aircraft in general – a trend he said will also hit its European rival.
“Airbus’s A320neo family registered 29 cancelations in 2020 so far, with most of them from Avianca, a Columbian airline invoking business transformations. More cancelations are to be expected with the prolongation of the COVID-19 air travel ban, but the slimming down of airlines’ fleet is expected to be a longer-term trend.”