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Airlines

Aerospace Industry Sees Largest Cycle in History, Boeing and Airbus Experience Eight-Year Order Backlogs

Strategic Insights

— 1 min read

The aerospace industry has entered a supercycle, with Boeing and Airbus experiencing unprecedented eight-year order backlogs totaling over 12,000 planes. This trend is driven by a decade of renewed growth after a series of recessions and the pent-up demand for new, more efficient aircraft. As airlines and manufacturers scramble to meet this demand, aerospace suppliers such as TransDigm, Rockwell Collins, and Spirit AeroSystems are poised for continued growth well into the next decade.

Key Takeaways:

  • The aerospace industry has experienced a significant increase in demand, with industry sales rising to $228.4 billion in 2014, up from $219.4 billion the prior year.
  • Boeing and Airbus have an eight-year order backlog totaling over 12,000 planes, the longest backlog in industry history.
  • The backlog has driven a surge in orders for new, more efficient aircraft, with airlines and manufacturers scrambling to meet demand.
  • Aerospace suppliers such as TransDigm, Rockwell Collins, and Spirit AeroSystems are poised for continued growth, with GE Aviation expecting 15,000 commercial engines to be delivered over the next few years.
  • The industry is expected to continue growing, with Boeing forecasting long-term demand for 36,770 new airplanes, valued at $5.2 trillion.
  • The global oil glut has cut fuel costs for airlines and consumers, leading to more spending and air travel, and boosting the need for more planes.

Statistics:

  • Industry sales rose to $228.4 billion in 2014, up from $219.4 billion the prior year.
  • Boeing and Airbus have an eight-year order backlog totaling over 12,000 planes.
  • GE Aviation expects 15,000 commercial engines to be delivered over the next few years.
  • Boeing forecasts long-term demand for 36,770 new airplanes.
  • The majority of new planes will be for fleet growth, stimulating expansion in emerging markets and development of innovative airline business models.
  • Aerospace suppliers are expected to continue growing, with the industry expected to be humming along at a steady state for the next three to five years.

Sources:

  • Sterne Agee CRT analyst Peter Arment
  • Aerospace Industries Association
  • General Electric CEO Jeffrey Immelt
  • GE Aviation Vice President of Commercial Engines Operation Bill Fitzgerald
  • Alcoa CEO Klaus Kleinfeld
  • TransDigm CEO Nick Howley
  • Rockwell Collins
  • Spirit AeroSystems
  • Forecast International
  • Boeing's "Current Market Outlook 2014-2033" report
  • Investor's Business Daily

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