The Q2 2021 picture for aerospace orders and deliveries

Figures for global aircraft orders and deliveries in the first half of 2021 showed a mixed picture. June delivered a substantial boost to the year to date as customers placed 292 aircraft orders, taking the total for 2021 to 764.

However, most orders placed with Airbus and Boeing in June were due to customers changing preferences to the type of aircraft on order. Combined with just 453 deliveries January to June 2021 – down from more than 600 every year 2013 to 2019 – the rise in the overall order backlog of 12,866 orders is limited.

Single-aisle aircraft remain more popular than widebodies, accounting for 88% of all orders in the first half of 2021 as domestic travel and demand for single-aisle planes continue to drive the slow recovery of the aerospace sector. However, the 90 widebody aircraft ordered in the first half of 2021 hold a similar value to UK industry as the 674 single-aisles, each worth around £4.5bn.

Production rates are expected to remain lower until travel restrictions are eased and immediate demand for new aircraft deliveries improves. UK flight arrivals and departures have improved slightly and are now 67% below 2019 levels, but remain low due to ongoing international travel restrictions fuelling passenger uncertainty.

The aerospace and aviation sectors continue to be deeply impacted by the pandemic, though the rising order book in June is a welcome sign of potential recovery for the UK’s aircraft manufacturers.

However, deliveries remain significantly depressed, and the low volumes of international flights in the UK and around the world are holding back recovery in this sector.

The recent changes by the UK Government to allow vaccinated travellers to avoid isolation are welcome. We believe that there is still more to do in enabling a full return to international travel, reducing costs, and restoring passenger confidence.

Notes:

• Global aircraft manufacturers reported 292 orders in June 2021, and the highest number for the first six months of the year since 2018
• However, aircraft production and deliveries remained down on pre-pandemic levels, with 453 aircraft deliveries in Q1 and Q2, due to the ongoing impact of Covid-19
• Index of Production figures for May released this month by the Office of National Statistics show UK aerospace manufacturing output still 39.2% smaller than February 2020