Aircraft production recovery has not been as rapid as air travel demand
While global air travel is close to recovered in most markets, the build back of aircraft production has not been as rapid.
Part of the issue is the long lead time inherent in aircraft manufacturing, with production decisions taking many months to have any noticeable impact on output.
Another issue is that the impact of the pandemic on the global aircraft manufacturing is still playing out across the complex global supply chains that have developed to produce modern commercial airliners.
OEMs have been struggling to manage supply chains
Even prior to the pandemic, Western OEMs were struggling to get their supply chains to meet planned increases in output.
The stresses and strains of the COVID-19 period only exacerbated these problems, with manufacturers having to take a more active role in recent years to help their suppliers in terms of volume and deliveries.
Alongside this are further supply chain complications due to impacts from the Ukraine-Russia war.
As a result, the build back their commercial aircraft production capacity at Western OEMs has lagged the wider air travel recovery.
In 2022, Airbus, Boeing, Embraer and ATR delivered 1,225 commercial aircraft between them to customers. This was 200 aircraft short of 2019 levels, and more than 600 behind the 2018 peak.
Western OEM aircraft deliveries (2000-2022)
Output over early 2023 has not been encouraging for those wanting new aircraft added to airlines' fleets.
Over the first five months of the year, the two biggest Western OEMs (Airbus and Boeing, who control more than 90% of the market between them) delivered 450 aircraft to their leasing company and airline customers.
In comparison, Airbus and Boeing delivered a combined 403 aircraft over the first five months of 2019 and 520 aircraft in the same period in 2018.
Airbus and Boeing cumulative aircraft deliveries (2019-2023 YTD)
Global airline fleets are missing more than 3000 aircraft
Over the past 20 years, Western OEMs have raised aircraft output by an average of just under 3% per year.
In the past decade, with rapid growth of travel in the Asia Pacific and other developing markets, aircraft deliveries have grown by 4% p/a (which is still below the long-term passenger traffic growth, which has averaged around 5% to 5.5%).
Had the COVID-19 pandemic and Boeing's delivery halt on the 737 MAX not occurred, deliveries of commercial airliners globally for 2023 could reasonably be expected at somewhere around 2,100 to 2,250 aircraft (based on average growth rates).
However, actual deliveries for 2023 are expected to be somewhere around 60% to 70% of these levels.
Western OEM aircraft deliveries and announced production intentions
As a result of the 2020-2022 decline in output, CTC's sister publication, CAPA, estimates that global original equipment manufacturers lost out on delivering somewhere between 3,300 and 3,500 new commercial aircraft to customers.
With an active global commercial fleet of around 33,500 aircraft, this means that airlines have needed to keep older airframes in service as they wait for OEMs to sort their production lines.
Deliveries will keep climbing, but only slowly
According to declared targets, Western OEMs are hoping to deliver at least 1,400 aircraft for 2023.
Airbus has set its 2023 production target at 720 aircraft, although its deliveries lagged 2022 levels early in the year.
Major rival Boeing has announced it expects 400 to 450 737 MAX deliveries in 2023, as well as 70-80 787 deliveries and around 36 each for the 767 and 777s. That puts total deliveries in a range of about 540 to 600.
Regional turboprop manufacturer ATR is expecting to deliver "at least" 40 aircraft in 2023, while regional jet maker Embraer is projecting it will get around 65 to 70 commercial aircraft to customers.
If delivery targets are hit this year (and that remains a big "if"), the Western OEMs should get somewhere between 1,365 and 1,430 new commercial aircraft to their customers in 2023.
Based on the OEM's declared intentions, these production rates will continue to build for the next few years. High capacity narrowbodies and midsized twin-engine widebodies will be where most of the production gains are made.