Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing 3Q deliveries up despite strike October 8, 2024
- Strike slows Boeing’s march toward improving safety culture October 7, 2024
- Aerospace supply chain still ailing; Sustainable Aviation Fuel isn’t the answer to go green October 4, 2024
- Bjorn’s Corner: New engine development. Part 27. Long developments October 4, 2024
- Longshoreman strike adds to Airbus, Boeing woes October 1, 2024
When Hazy talks, people listen….
Steven Udvar-Hazy, the CEO of International Lease Finance Corp., carries enormous weight in the airline industry. His ILFC is the biggest customer of Airbus and Boeing. His public criticism of the A350 (Version 4.0) at the ISTAT conference two years ago (in response to a question we asked, BTW) set the stage for Airbus to redesign the aircraft.
Hazy once said he doesn’t think the A380 will sell more than 300-400 and he doesn’t think the 747-8I will sell well, either. Both predictions remain to be seen, but people listened.
While the world waits for Boeing to tell us about the latest delay for the 787, Hazy told the JP Morgan Aviation & Transportation conference today that he expects an all-in delay of 15-16 months from the original May 2008 delivery schedule, according to someone who was there. That means August or September of 2009 before the first delivery.
Hazy is usually extremely well clued in on these sorts of things. He told us of the third delay for the A380 before this became public, and we broke the news at the time.
It’s like the old EF Hutton slogan: When EF Hutton talks, people listen. EF Hutton is defunct, but this analogy isn’t to suggest that ILFC is headed that direction. It’s simply a great line.
VLA and the Airbus-Boeing forecasts
Boeing has had a long run in the spotlight, given the tanker award and protest and the Goldman Sachs report predicting another six month delay for the 787.
For a change, let’s take a look at the Airbus and the A380.
Airbus predicts a market of nearly 1,700 passenger and cargo airplanes in the Very Large Aircraft (VLA) category in its new forecast issued this year. Boeing forecasts 960 VLAs in its market outlook issued last year. Each prediction is for a 20-year period, or 2027 for Boeing and 2028 for Airbus.
The math is pretty simple: to achieve 1,700 VLA sales under the Airbus forecast (and it doesn’t matter whether it’s Boeing or Airbus, both the A380 and 747-8 are VLAs), this is an average of about 85 sales a year beginning this year.
To achieve the 960 figure from Boeing beginning last year, that means an average of 48 VLA sales a year.
Airbus predicts 30 sales for the A380 this year. Boeing hasn’t made a public prediction for the 747.
It’s pretty clear Airbus is just a tad short.
For comparison, Boeing has sold 1,522 747s since the first order in 1966, 42 years ago. That’s an average of 36 a year, and this started when the 747 had a monopoly for a few years as the world’s first jumbo jet–and maintained a monopoly on trans-ocean routes until the DC-10-30/40 and L-1011-500 began making serious inroads.
We’ve always thought Boeing’s forecast of only 300-400 sales of the A380 was woefully inadequate. But we’ve also thought the Airbus forecast of 1,700 VLAs in 20 years was wildly optimistic.
The math certainly suggests as much.