Air Transport World

A new buying cycle?(commercial aircraft manufacturing forecast)(Industry Overview)

Transport makers enjoyed a sales surge in 1995 and expect even better results this year

The three major commercial transport manufacturers had a surprisingly good year in 1995 and Airbus Industrie, Boeing Commercial Airplane Group and McDonnell Douglas are predicting that the positive surge will continue this year.

Through the first 3 1/2 quarters of 1995, the big three order books plus those of Fokker and Avro showed more than 500 firm orders, easily valued at more than the $33.4 billion for this group in 1991 and the best year since 1990, when they sold 929 aircraft. The 1995 surge was good enough to launch three new programs, two at Boeing and one at MDC. These manufacturers sold 348 airplanes valued at some $19 billion in 1994.

Last year's results were surprising because few predicted such a surge. All three of the big manufacturers believed 1995 would be better but not as good as it turned out. They noted the improved airline-profit performance that began in the second half of 1994, and believe that the "bottom" of the recent down cycle occurred that year. To them, this translates into the start of a new airplane-buying cycle.

As MDC VP-Marketing Walt Orlowski put it: "No doubt, they have had a recovery. The airlines that did the cost cutting in the early '90s are doing well. We look at used-aircraft availability as an index. They are tight right now and lease rates are rising."

Still, the airplane builders do not forecast anything resembling the buying spree they enjoyed in the 1988-90 period, during which they, plus Fokker and British Aerospace, sold 3,385 transports worth more than $200 billion. …

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