Recent market declines should not pose a material risk to the aircraft delivery outlook over the next three to four years, according to Bernstein Research. The New York research group said that the backlogs at Airbus and Boeing are almost double where they stood at the beginning of previous downturns
“Airbus and Boeing are each sold out on production into 2015, even with rising production rates, with many deliveries scheduled even later,” Bernstein said. “Even if some customers cancel orders, we believe that slots will be picked up by others, as was the case in 2008-2010.”
Bernstein noted that demand was coming from emerging markets (even under more modest GDP scenarios) and from the need to replace ageing fleets with more fuel-efficient aircraft.
Even after the stock market decline began, demand has continued in the Asia-Pacific region.
“We expect that any downturn this cycle will qualitatively resemble what we saw in late 2008 through early 2010, when there was contraction in global GDP and traffic, but only minimal impact to customer deliveries. In the last cycle, traffic was down during the downturn, but deliveries stayed strong, and orders outpaced deferrals and cancellations at Boeing even during the downturn,” Bernstein said.