The choice of manufacturers when buying a new narrowbody jet has gone from two to five in only a few years. Competitive airlines used to be able to choose either Airbus or Boeing, now they can also choose from Russian, Chinese and Canadian offerings, with new-generation engines and promises of improved operating efficiency.
Airbus and Boeing's reaction has been to offer versions of their narrowbody jets with new-generation engines. Although Boeing has other priorities ahead of creating a new narrowbody design, it is perhaps also true that new technologies which deliver enough benefit to justify a new narrowbody from Airbus or Boeing are unlikely to be ready until the latter half of the next decade.
Have their strategies paid off? Looking at order intake, it certainly appears so according to Flightglobal's ACAS database. Prior to the launch of the Bombardier CSeries, Airbus and Boeing each took about 50% of the net order intake for narrowbody jets. After a slow start from launch, in 2009 Bombardier took an 11.5% share of order intake from Boeing and Airbus. When the first orders were placed for the C919 and MS-21 in 2010, the share of new entrants rose to 13.4%.
Airbus fought back with its re-engined A320neo to take 65% of the net orders placed in 2011. Boeing has followed suit with the 737 Max, holding a 71% share so far in 2012.
On a global level, it seems clear the reactions of the two long-established players have worked and minimised the impact of new entrants on their market shares. Last year, about 9% of orders were placed with the three new entrants combined. In 2012, this has fallen to less than 5% so far.
This does not mean new entrants cannot make significant inroads into the narrowbody market, but it is likely to take time. It took Airbus about 20 years and three aircraft family launches to achieve 40% share of jet orders by 1990. It was another decade before it gained a market share comparable with Boeing. The benefits of volume, installed base and global support operations favour the incumbents. If new entrants are to get viable market positions and volumes it is likely to take a long time and further aircraft family launches.
However, the effectiveness of Airbus and Boeing's re-engining strategy varies by region. In China, Flightglobal's ACAS database shows no backlog for any of the new generation of narrowbodies, except for a 17% share for the C919. In this high-growth market, the local product is bound to have some success. Comac has already spoken of its intent to create a larger aircraft.
Outside China in the wider Asia-Pacific region, all the new entrants have had an impact on order backlog but the Airbus A320neo family is the strong leader.
Where the CSeries and MS-21 have achieved greatest share is in Europe. This is not surprising for the MS-21 as it is the local offering in eastern Europe. Unless they are happy providing niche offerings, to achieve long-term success Irkut and Bombardier will need to do more to penetrate the growing China and Asia-Pacific markets.
The 2012-H1 Flightglobal Commercial Fleet Forecast predicts that gaining market share in the growth markets of China and Asia-Pacific will be important for the long-term success of new narrowbodies, because half of deliveries in this sector are predicted to be to these regions until 2031.
For the next 15 years or so, Boeing and Airbus are set to maintain strong market leadership. Beyond this, both are likely to introduce all-new narrowbodies and have the market share to justify it. By then, at least one of the new entrants is expected to be competing with a widebody offering. This is when things will get more interesting, and the "Big Two" will really be under threat.
For the new entrants, having the cash and resolve to stay the course will be essential. Comac is probably the one to watch with local demand in China, where "long term" means a very long time.
Source: Flight Global
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