As slow as the market seems to most observers of aircraft sales, it is suggest a market pause predicated on what the fuel price will do. The price per barrel of oil will boost or freeze sales at this junction. A true pause has made both Airbus and Boeing work harder pushing the respective order books. With Boeing's 122 net sales during the first quarter 2016 and then Airbus only netting a ten count, the manufacturers must rely on the foreseeable market trends.
Continued low fuel prices will grow the industry from the demand perspective. New aircraft orders for the latest airplanes will go into temporary repose as currently experienced during 2016. Leasing used airframes is a hedge against long term capital intensive acquisitions. As, and when fuel prices rise, a pent up need for new generation aircraft will rise to the top of the firing order for the market place.
This is the current position for having all new generation airplane orders flooding the market from wide body to single aisle frames. The new norm for fuel will have a steady but modest increase going forward until 2018. The modest fuel price increase will allow the market to settle with a steady but lower purchase pace. One American Company, Delta, has yet to commit for its MD 80 replacements. However, because of the used single aisle supply having a robust inventory, Delta will use the right time-right price strategy for replacing its fleet of older aircraft. The Airbus NEO backlog maybe too deep for Delta and Boeing's factory production of NG's may accommodate Delta at the right time for the right price.
A transition to the MAX would be made easier for transitioning forward using a low ball NG purchase and converting some of the single aisle in a purchase block later on by changing remaining open orders into MAX orders at an appropriate time. The Airbus book is too far out with its NEO's and the 737 NG is a better aircraft than the A320 CEO. A win for Boeing would make the Boeing order book draw closer to a 50-50 split with the Airbus offering.
Once fuel prices begin turning northward, it will signal a much anticipated resumption of a stable oil market from its current collapse of $40 per barrel price. A $70 per barrel price will begin to move more duo aisle aircraft for both makers. Boeing has a favorable and smaller 787 backlog at this time over the Airbus A350, as mentioned in a prior Winging It Blog. The Boeing 2016 book orders currently lead Airbus' paltry net of 10 ordered. In the coming months Airbus will have its order day, but it will be important to notice if Boeing continues its 40 ordered a month pace during the 2nd quarter 2016. If it does, and Airbus remains relatively quiet, then there is definitely a backlog bias in Boeing's favor.