Sean Broderick's aviation career started in 1991, working for Airbus in Toulouse. His industry experience includes four years with an aviation consultancy, where he worked on the successful launch of a U.S. Part 121 carrier; 12 years with an airport association as a magazine editor and communications executive; and more than 15 years of full- and part-time work as a journalist, writing about air transport and business aviation. &nbsp;
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Sean Broderick

The year ahead will see Boeing launch its much-discussed New Midsized Airplane (NMA) and a demand climate that supports planned production increases on the most popular commercial aircraft, Canaccord Genuity projects.

 


"We believe it is no longer a question of if Boeing will officially launch its NMA, but when," Canaccord's Ken Herbert wrote in a recent research note. "We believe this will be perhaps the most significant industry event in 2018."

 


Canaccord sees an NMA with a capacity of 220 to 260 passengers and a range of about 5,000 nm.

 


"The challenge for Boeing will be to offer an aircraft with widebody size and range and narrowbody economics," Herbert wrote, adding that the design would incorporate&nbsp;composite wings and fuselage and a single engine choice—likely a GE or CFM powerplant.

 


While Boeing has not provided a timeline for its NMA program, it has established a dedicated office studying the project, which would fill a capacity gap between its 737 and 787 lines. State and local officials <a href="https://www.ainonline.com/aviation-news/air-transport/2018-01-03/competition-begins-production-site-boeings-nma">are lining up to persuade Boeing</a> on possible production sites.

 


Meanwhile, sustained strong traffic demand will support production increases for the 737 and 787 as well as the A320, but only for a few years, Canaccord notes. The firm's analysis shows global airline seating capacity increasing by 7.3 percent in 2018 and 6.9 percent in 2019 before cooling to around 6&nbsp;percent through 2021 and dipping to 5.5 percent in 2022.

 


"With 6 to 7 percent annual growth in seat capacity, the industry has no margin for error," Herbert noted. "Moreover, the anticipated growth in some regions, such as the Middle East and India, [is] based on even more bullish assumptions about traffic growth and share gains, which in our view create additional risk to the cycle."

 


Boeing last June boosted 737 monthly production rates from 42 to 47 and has announced plans to go to 52 per month this year. Airbus in 2016 raised its A320 rate to 46 per month and plans to produce at a rate of 60 per month by 2020. Canaccord says the increases will likely go forward, but questions how long they will stay in place.

 


"We are still bullish on the 737 and the A320, and we see little risk to the announced rate increases on those programs," Herbert wrote. "However, we are cautious on how long these increases can be sustained."

 


Canaccord has similar concerns with Boeing's 787 rate increase to 14 per month in 2019, up from 12 per month. Boeing, citing traffic projections and the need to replace aging widebodies, <a href="https://www.ainonline.com/aviation-news/air-transport/2017-09-15/traffic-widebody-demand-back-boeings-787-rate-bump">confirmed the move last September</a>.

 


Canaccord says commercial orders "surprised to upside" in 2017, and projects an aggregate book-to-bill of just under one in 2018. One expected headwind will plague&nbsp;Airbus, which&nbsp;will struggle to maintain momentum during <a href="https://www.ainonline.com/aviation-news/air-transport/2017-12-15/shakeup-airbus-see-departure-enders-bregier">its leadership change</a>, according to the firm.

 


"We believe the management turnover at Airbus will be a headwind to potential sales campaigns in 2018, and near term it is creating a strategic vacuum," Herbert wrote.

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