What Will Happen To Aircraft Deliveries During Aviation’s Slump?

Before the coronavirus pandemic came along and changed the world as we know it, it was business as usual for airlines around the world. Some were struggling, but many had ambitious plans for expansion. Of course, fleet expansion is one of the main aspects of airline growth, but what will happen to existing aircraft orders and deliveries now that the industry has been turned on its head?

BA Boeing 747s at London Stansted
The coronavirus pandemic has been catastrophic for the commercial aviation industry. Photo: Getty Images

It’s a question many in the aviation industry will be pondering at the moment. What will happen to all the aircraft orders airlines committed themselves to before the coronavirus pandemic hit?

One thing is for certain – the business landscape won’t be the same when the travel restrictions are lifted, whenever that may be. Airlines have had to take billions of dollars from governments just to stay afloat over the next few months, and it looks like widespread job losses and suspensions are guaranteed.

Are the big two still delivering aircraft?

While Boeing’s delivery total for February this year was significantly down on February last year, with a total of just 17 in comparison to 49, Airbus’ delivery total for February this year was significantly higher, with a 55 compared to 49. Boeing’s big drop this year is attributed to the 737 MAX scandal, which has drastically reduced manufacturer’s sales over the past 12 months.

Although Airbus managed to deliver an impressive number of aircraft in February, this was still before the real effects of the coronavirus pandemic hit. The true impact will not be obvious until a few months down the line when old previous orders have been completed and the decline in demand sets in.

Boeing 737 MAX
Boeing was already suffering as a result of the 737 MAX scandal. Photo: Steve Lynes via Wikimedia Commons

Will airlines still be ordering aircraft?

While the effects of coronavirus will be felt differently by different airlines, it’s unlikely we will see any new aircraft orders for a while. Some smaller airlines will undoubtedly go bust, meaning their orders will fall through as well. This will leave more used aircraft on the market, and free up space in the manufacturers’ backlog.

Discussing the topic with Flight Global, AirAsia Group’s chief executive Tony Fernandes said, “No airline is talking about growth right now. It’s about hunkering down, being positive, and bouncing back when the lockdowns come out and we begin to beat this virus, which will eventually happen.”

At the moment, the common theme among all airlines is a focus on cutting costs and weathering the current storm without going under. With such an uncertain timeline ahead, expansion plans have been scrapped for the foreseeable future.

AirAsia X revealed that it was looking to postpone its order for 78 Airbus A330neos back in February as a result of coronavirus uncertainty. AirAsia’s order accounts for 28% of all current orders for the Airbus A330neo.

AirAsia X Airbus A330
AirAsia X accounts for 28% of all Airbus A330neo orders. (Airbus A330-343 pictured). Photo: Chung Yen314 via Flickr

As a result of uncertainty around future orders, financial ratings firm S&P warned last week that it may downgrade Airbus’ credit profile. Boeing is in an even worse position as it now has to deal with the massively reduced demand on top of the ongoing trouble caused by the grounding of the Boeing 737 MAX. As the coronavirus pandemic continues, the outlook for aircraft manufacturers will only continue to deteriorate.