[Analysis] New deferrals show that Airbus is as exposed as Boeing to air travel crisis, says GlobalData

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Following news that Iberia has rescheduled orders of A320neo and A350, Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the situation:

More deferrals will be hitting Airbus’ order book after Spanish airline Ibera decided to postpone deliveries of A320neo and A350. It is a blow for the European planemaker that still has 11 A320neo and 13 A350 in its order book for Iberia. The actual delay has not been announced yet by the airline, but it is likely to result in at least several years of delay in order to assess the potential of recovery for a post-COVID-19 air travel industry. Such deferral is far from unique in the current situation, as we have seen two weeks ago with the postponing of 68 B737 MAX from SMBC Aviation Capital until 2025 at least. A five-year delay seems a credible time frame to securely assess market recovery and avoid overcapacity.

“Airbus’ platforms such as the A320 family are normally considered less exposed than Boeing’s to deferral, especially regarding the B737 MAX and its uncertain future. The plane is still grounded after two successive crashes in 2018 and 2019, and has been hit with significant cancellations since the beginning of the crisis. Companies such as Air Canada or Air Lease Corporation even cancelled MAX orders in massive proportions earlier this year without even directly invoking COVID-19. But even Airbus’ healthier A320neo, A330 and A350 have seen their production rates cut by 40% to face the crisis. A growing list of airlines and leasing companies have decided to adopt a fiercely risk-averse strategy. More deferrals, and therefore production cuts, are to be expected from Airbus and Boeing, regardless of the model.

19th June 2020

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