Aircraft manufacturers feared that the coronavirus pandemic would deal an almost fatal blow to them and their aircraft buyers, airlines and leasing groups. Eighteen months later, passengers have returned – but mostly on short lines.
As passenger demand approaches or even matches pre-pandemic levels on shorter journeys using smaller single-pass jets, long-haul traffic remains subdued as many large wide-body aircraft flying intercontinental routes remain stationary.
With more than 1,400 of these two-pass jets still stored in aircraft hangars in early December, according to data from the aviation consulting firm Cirium, the recovery time in the wide-body vehicle market remains uncertain.
Although the numbers have been reduced compared to the peak of the pandemic in March 2020 when there were about 3,586 double passes in storage, that’s still almost 30 percent of the current fleet as airlines are slowly bringing those planes back into service.
This is in stark contrast to pre-pandemic times when some executives say there were too many larger aircraft after decades of strong production and delivery.
When Covid struck, there was a “slightly inflated backlog of wide-body aircraft” after “a bit of a madness around ordering,” said Christian Scherer, Airbus ’chief commercial officer.
The pandemic helped to “sober up” and “vaccinated large airlines a little further than large aircraft and a little more towards lower-risk models and lower travel costs,” he added.
On the eve of the crisis, Boeing and Airbus were eager to push their large wide-body jets.
There was a lot of excitement around the Boeing 787 and the Airbus A350 [both wide-bodies] bringing a lot of technology and efficient economies to market, ”said Kevin Michaels, CEO of Michigan-based AeroDynamic Advisory.
“It was a period [the past decade] strong growth in air traffic. We grew at this dizzying pace, and you had a strangely high price of fuel with a low price of capital. Combining the two with new technology and a period of strong growth. . . all these things have conspired to have airlines aggressively order, ”he added.
Scherer is, however, “absolutely convinced” that demand in the two-pass jet market will continue “with equal force” as the market for short or domestic flights, once international and intercontinental traffic resumes.
But it may be “somewhere between 2023 and 2025, other than anything else” before long journeys recover, he said. It will then take even longer to return to the level of wide-body aircraft production before the pandemic.
Other industry leaders are insisting on a long-distance recovery and that a wide body market will happen, but admit it will be uneven.
Warren East, chief executive of British aerospace maker Rolls-Royce, which is heavily exposed to the wide body market, said in early December that any recovery it would not be linear, especially in light of the Omicron variant. “It will be a story of 10 steps forward and two steps back,” he said.
Ed Bastian, CEO of Delta, reiterated East’s comments, warning that Omicron hit bookings in January, mostly for international travel. Dip appears “wherever. . . countries have imposed travel restrictions, ”he added.
Ihssane Mounir, Boeing’s senior vice president of commercial sales, said “people want to travel” and stressed that demand is high in the long run. However, he acknowledged that it was “too early to announce” when the producer’s production rate for 787, which peaked at 14 per month in 2019, would reach that height again.
“We need to increase from two to five and then see how it goes,” he said.
Independent analysts share Scherer’s view that the recovery in the rate of production of wide-body jets will take at least until the middle of the decade.
“I believe the production rates of the new wide-body will not return to pre-pandemic levels, at least not for many years,” said Scott Hamilton, of aviation consulting firm Leeham News.
Michaels of AeroDynamic agreed, saying it could pass in 2030 before production of the twin-engine 787 reaches a monthly high of 14 in 2019.
For the largest jet aircraft, four-engine aircraft, the market is “almost completely gone,” said Rob Morris, head of consulting at Ascend by Cirium. “Many of them are separating or abolishing.”
However, there are green shoots for the new twin-engine jets, says John Plueger, CEO of Air Lease, one of the world’s largest aircraft renters. “We are seeing a slow increase in demand for a new generation of wide bodies, but it is certainly not nearly as strong as a single-ship.”
Demand for cargo capacity is one of the reasons for the increase in demand for a wide fuselage, he said, because airlines use passenger planes to try to take advantage of high cargo and cargo prices.
Forecasting demand, however, has been complicated by long-standing problems with Boeing in production with the 787 Dreamliner as it struggles to correct quality issues. American Airlines said it will have to change its summer schedule because the promised 787s have not arrived.
Plueger, another Dreamliner user who canceled three orders due to problems, was visibly frustrated by the delays, saying: “We as an industry cannot be in place. . . where one in two aircraft manufacturers simply cannot deliver one of their key products. . . The industry needs these aircraft and we need at least two strong main competitors in Boeing and Airbus. ”
Boeing also has a big bet on reviving international flying with its next wide-body model, the 777X. Offered in two variants, 777-8 and 777-9, which can carry up to 426 passengers on long lines, it is the largest among the big ones now that the Airbus A380 has stopped production. 777 has begun rehearsals but is at least two years late.
Some observers think it will prove too big to please a pandemic-laden airline audience.
“The 777-9 is simply too big for most airlines – these are the next A380 and 747 in the sense that they are the wrong size in today’s market,” said Hamilton of Leeham News.
Others, however, think that people should not count on 777-900 wide-body jets. Michaels said Boeing will find buyers among major intercontinental Middle Eastern airlines. Boeing expects to also come out with the 777X cargo ship.
The 777X will be the largest jet on the market when carriers start changing their biggest aircraft in 2025 and 2026, Boeing’s Mounir said. With more than 300 orders for aircraft already, “the time is sure to come,” he added.
Despite the uncertainty at the time of the recovery of the wide-body vehicle market, there is a big bright spot for the industry: demand for single-pass aircraft has returned, and airlines are seeking to rebuild their fleets after the crisis.
Airbus’ Scherer said demand remained firm despite the rise of the new Omicron variant. The airline community as a whole, he said, has realized that “when people can travel, they will travel and they will do so in revenge.”