While air traffic is picking up and Boeing sees “tangible signs of recovery,” analysts at UBS say airlines have ordered too many planes already, particularly Airbus’ A350 XWB and, more so, Boeing’s 787 Dreamliner.
“Our analysis reveals that many of Airbus’ and Boeing’s top customers appear to have over ordered, even after assuming future growth at high levels, which could result in additional deferrals and cancellations and, at minimum, likely yields few orders from what have been the manufacturers’ largest customers,” UBS analysts, led by David Strauss, wrote in a report released Tuesday.
The analysts focused on the top 100 airline customers, accounting for an estimated 70 percent of Airbus and Boeing’s combined backlog of nearly 6,800 aircraft and roughly 60 percent of the two plane makers’ scheduled deliveries over the next five years.
Airbus has more risk, with its single-aisle mainstay A320 over ordered, while Boeing’s 737 has the potential for new orders from customers looking to replace aircraft, the analysts wrote.
While 65 percent of the Boeing and Airbus backlog is single-aisle, the widebody orders are more at risk, according to the report. “We see nearly 400 excess widebody orders that could be deferred, with both manufacturers’ widebody product appearing over ordered. The 787 and A350 appear particularly over ordered.”
The analysts gave one caveat, writing in their 787 section: “While it is possible that airlines might have considered a longer time horizon when placing their orders than the eight years we have assumed in this analysis, we believe some over ordered.”
Here’s UBS’ breakdown by model:
Boeing 787 — 275 over ordered;
777 — 33 over ordered;
737 — 206 under ordered;
747 — 44 under ordered;
Airbus A350 — 250 over ordered;
Airbus A330 — 83 over ordered;
A320 — 152 over ordered.
