IBA, an aviation market intelligence and advisory company, retains an optimistic outlook for the aviation industry, despite a lower-than-expected number of aircraft orders at the 2024 Farnborough Airshow. This is based on analysis of orders from the 2024 Farnborough International Airshow using data from the IBA Insight aviation intelligence platform.
The actual orders during the Farnborough Airshow fell short of IBA’s original predictions. While several expected airlines, including Qatar Airways, Cebu Pacific Air, Korean Air, Virgin Atlantic and Berniq Airways, followed through on their predicted orders, other key predicted carriers, including Turkish Airlines and Riyadh Air, did not.
Additionally, none of the airlines considered by IBA as ‘outsider prospects’, such as Delta Air Lines, LATAM Airlines, Air France-KLM, IAG, nor other carriers from the China and Southeast Asian regions, placed any orders at the air show.
IBA’s view is that the low activity at Farnborough does not reflect the actual drive of airlines to replace and grow their fleets. The shortfall in airshow orders was largely attributed to a combination of factors including recent consumer pressure, long delivery lead times, OEM performance, and a reduced need to incentivise customers to place airshow orders.
The global political and economic landscape, along with supply chain challenges, are affecting the delivery timeframe and cost of aircraft, with IBA expecting this trend to last longer than previously anticipated, extending the operational life of the previous generation of aircraft.
Despite a lower than anticipated level of total orders, market sentiment towards aircraft demand remains strong, even amid supply chain and consumer demand issues, with orders expected from various airlines due to existing fleet ages, backlogs, and the need for fleet replenishment and growth.
IBA predicts that Turkish Airlines will place an order for over 200 Boeing aircraft this year, while Riyadh Air’s previous order of narrowbody aircraft in May 2024 is yet to be confirmed.
IBA forecasts that multiple other airlines will place orders in the coming months. Chinese Airlines need to replace over 100 widebody aircraft, and Air France-KLM and IAG face the challenge of increasingly ageing A320 fleets. The current fleets and order backlogs of Cathay Pacific, EVA Air, and Thai Airways are insufficient for replacement and growth, meaning that orders from these airlines are expected soon.
IBA also expects Qatar Airways to order further A350s, Delta Air Lines to commit to additional A330s, American Airlines to outline the next stage of its expansion, and Emirates to unveil an order to support its growth trajectory.
Airbus dominated the Farnborough Airshow order book with a total of 316 orders, with the A320 and A321 models accounting for 77.8% of these. In contrast, Boeing secured just 118 orders at the show, with the 787 and 777X models making up 76% of their total, receiving 50 and 40 orders, respectively. ATR also fell short of anticipated levels, with the ATR 72 comprising their entire order book, and totalling only four orders.
IBA’s intelligence highlighted that, while narrowbody aircraft orders continued to dominate the market in 2024 with 273 in total, the growing shift towards widebody aircraft orders continued. At Farnborough Airshow in 2024, 157 widebody orders were recorded, up 19% from 132 in 2023 at Paris Airshow. Conversely, narrowbody orders saw a significant decline, with the 273 orders in 2024 representing a 75% decrease from the 1,070 narrowbody orders placed in 2023.
The market value performance of most aircraft models continues to follow a positive trend. According to data from IBA Insight, from July 2023 to July 2024, the market value of a new Airbus A330-900neo increased by 5.3%, mirroring a similar trend in the Airbus A350, which also saw a 5.3% rise across the same timeframe. During that same period, a new widebody Boeing 787-9 experienced a 3.4% increase in market value, while the Boeing 787-10 increased in value by 2.6%, further demonstrating the robust demand for new widebody aircraft.
IBA data also revealed that lease rates continue to trend upwards, with the market lease rate for a new A330-900neo increasing by 8% over the past 12 months, climbing to a five-year high of US$875,000 in July 2024.
In a similar vein, although neither the Airbus A220 nor the Embraer E2 received orders at Farnborough, IBA Insight data indicates that their values continue to grow. The market value of a new A220-300 rose by 3.2% to US$40.52 million in the 12 months to July 2024, with the aircraft dominating the market with 523 on order and 225 currently active. Meanwhile, the market value of a new E195-E2 increased by 2.7%, to US$38.01 million, with 181 of the type on order and 88 currently active.
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