Boeing, Airbus prepare for next narrow-body jet battle
Boeing’s And Airbus They are starting to map out the next generation of narrow-body aircraft, but the world’s two dominant planemakers say airline customers are more interested in taking delivery of today’s jets than pushing for entirely new models.
Boeing CEO Kelly Ortberg said Monday that the company still needs “a few years” to get its finances in position to support a new commercial airplane program.
Meanwhile, Airbus CEO Guillaume Faury said the European manufacturer aims to launch its next-generation single-aisle program around 2030 and enter service in the second half of the next decade.
Although the two senior executives struck different tones, they generally pointed to similar time periods.
Airbus has publicly set a target year to launch its next aircraft. While Boeing has stated that it may proceed on a similar horizon financially, it also maintains the option to wait if the technology or market is not strong enough.
“We’re thinking of three things that need to happen,” Ortberg told CNBC’s Phil LeBeau. “First and foremost, we have to be ready, and part of that is getting our financial house in order, and we’re working on that. It’s going to take a few more years to get to where we want to be.”
The technology also needs to be ready and airline customers should be prepared to move on from Boeing’s current product line, he said.
“The market needs to be ready. Right now customers are telling me ‘focus on your current product line, we really want to see the current product line become more mature before moving to a new aircraft’.”
This situation arises because aircraft manufacturers constantly experience production bottlenecks in the industry. Boeing has been trying to ramp up 737 Max production and remains rocked by a series of production and quality issues and the near-catastrophic explosion of a fuselage door spigot in January 2024.
Airbus said engine availability, particularly from Pratt & Whitney, had forced it to adjust production plans for this year and next, but Faury said the situation had stabilized.
Faury said Airbus is focused on ramping up production and delivering planes already ordered, even as it prepares its next generation of commercial airliners.
“We are a long-term industry,” Faury said. “It takes time to prepare technologies and initiate a program for the product and production system, [to] “Enter service with certification, build the ramp.”
Faury said that Airbus is preparing its new generation single-aisle aircraft and wants to maintain its leadership in this market. The company aims to launch the program around 2030 and enter service in the second half of the 2030s.
But for both manufacturers, increasing production and delivering existing orders remain more pressing tasks.
Focus on aircraft deliveries
RBC Capital Markets analysts said last week that investors are focused on Boeing’s ability to ramp up production of the 737 Max and 787, complete certification of the Max 7 and Max 10, improve margins and generate cash.
“The primary focus for investors will continue to be the status of the supply chain and delivery schedules,” analysts wrote in a note to clients. he wrote.
The same situation seems to be valid for Airbus. RBC said investors are looking for a clearer path to meet Airbus’ A320 and A350 production targets after the company’s strong second-quarter deliveries boosted confidence in its full-year target.
Airbus has a backlog of more than 9,000 aircraft, and demand continues to exceed available supply. According to Jefferies analysts, Airbus received 51 A320neo orders in June, while almost all of the second-quarter delivery growth was driven by the A320 family.
Jefferies said Airbus’ increased A320 family aircraft delivery volume (190 units in the second quarter) is expected to drive a significant improvement in earnings. Airbus reports deliveries monthly and will release its quarterly earnings report next week.
At Boeing, the focus remains on completing the existing 737 Max family.
Certification work on the 737 Max-7 and Max-10 is 95% and 98% complete, respectively, Jefferies said Sunday. The Max-10 had 1,533 aircraft on order, accounting for roughly one-third of Boeing’s 737 backlog.
Ortberg said Monday that certification of the 737 Max-7 with the FAA is expected “very shortly” and would be a critical milestone because it would be the first new aircraft the FAA has certified in a long time.
This suggests that investors and airline customers broadly agree: they both want manufacturers to deliver on previously promised planes.
While both Boeing and Airbus work through a backlog of large orders and production constraints, airlines continue to add capacity using existing aircraft models.
ryanairThe delivery of the last aircraft in its current order of Boeing 737 Max 8-200 jets helped Ryanair expand its fleet to 650 aircraft and increase first-quarter traffic by 6%, Chief Financial Officer Neil Sorahan, Boeing’s largest customer outside the United States, said on Monday.
The airline expects passenger numbers to increase about 4% this year to 216 million, Sorahan told CNBC’s “Squawk Box.”
Neither manufacturer appears to be under intense pressure from customers to move faster, but work on next-generation aircraft continues.
The eventual successors to Boeing’s 737 Max and Airbus’ A320neo families could shape competition in the industry’s largest commercial aircraft market for decades to come. But before Boeing and Airbus can compete for tomorrow’s narrow-body aircraft, they both need to fulfill today’s orders.
