Contributor - Europe

Cathy Buyck

The International Air Transport Association predicts that new aircraft deliveries will reach a new 10-year peak in 2020 following a slump this year, though it cautions that a too-rapid growth of passenger capacity could cause load factors to slide and put pressure on yields. “Even if demand growth picks up in 2020, there is a threat that supply could rise even faster, given the 2,100-plus aircraft that are scheduled to be delivered once, as expected, the Boeing 737 Max returns to service,” chief economist Brian Pearce said at the airline trade body’s recent global media days in Geneva. “At 7.5 percent of the fleet, that represents an addition of more than 2 percentage points.”

 


According to IATA’s forecast, passenger capacity measured in available seat kilometers (ASKs) will grow 4.7 percent in 2020 while passenger demand in RPKs increases by 4.1 percent.

 


The Max grounding and delivery delays due to constraints in the aerospace supply chain or production disruption resulted in a capacity growth slowdown this past year, to a global average of 3.7 percent in terms of ASKs. That amounts to nearly half of the 6.9 percent ASK growth achieved in 2018. In terms of aircraft units, the fleet will increase by just one&nbsp;percent this year, expects IATA, compared with 4.4 percent in 2018. For 2020, IATA expects the commercial fleet—including widebodies, regional jets, and regional turboprops—to grow 5.3 percent year-over-year to more than 31,000 aircraft.

 


Next year, commercial airlines plan to take delivery of more than 2,206 new aircraft, equating to an investment of around $123 billion by the industry. A big part of the deliveries will replace existing members of the fleet, which, according to IATA, is making a “significant” contribution to increasing fleet fuel efficiency and lowering CO2 production.&nbsp;“One factor encouraging aircraft retirements and limited capacity growth in Europe will be the emergence of the climate change issue as a concern for mainstream investors,” Pearce said. Data from HSBC shows an “unprecedented rise in the number of conversations on this issue at airline earnings calls with investors,” he added.

 


IATA executives reiterated their well-publicized concern of a regulatory de-alignment of aircraft certification and validation processes following the Boeing 737 Max crashes and the type’s grounding, calling for a harmonized approach among regulators. “Mutual recognition of aircraft certification is critical, not only for the Boeing Max, but for all future aircraft,” IATA senior vice president of safety and flight operations Gilberto López Meyer stressed. “The traveling public needs confidence in the integrity of the airplane and so, if a state restores it to service, there should be no suggestion from other states that they don’t agree with the action.”

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