Aircraft deliveries continue at slowest pace since 2012

The aerospace industry reached 873 aircraft deliveries in the first nine months of 2019, 200 behind the pace set last year.

The rate of deliveries in the third quarter, which is the slowest pace since 2012, was worse than expected. This has meant the eight consecutive years of record growth from 2011 to 2018 are set to come to an end.

The global aerospace market is still waiting for factors affecting long-term growth in deliveries to be resolved, including the grounding of Boeing 737 Max jets by aviation authorities and airlines around the world.

Boeing’s quarterly deliveries are down 67% year-on-year, thanks largely to the grounding. Just five 737 Max planes were delivered in the third quarter of this year – by comparison last year’s quarter saw 138 deliveries of the jet.

Of the five delivered all of them were military surveillance aircraft for the US Navy as well as UK and Australian governments.

Another factor is the growing trade war between the US and Europe. The World Trade Organization recently found both Boeing and Airbus received billions of pounds in illegal subsidies, which has led to the US imposing a 10% tariff on Airbus planes sold to US airlines. No tariff will be imposed on planes manufactured at the Airbus site in Alabama which assembles the A220 and A320.

The ADS Group has revised down its forecast for 2019 deliveries for a second time, now to 1164 aircraft.

While the rate is significantly slower than expected at the start of this year, deliveries made in 2019 are worth £22 billion to UK industry so far. 300 widebody aircraft deliveries making up 75% of this total value.

The backlog of aircraft orders remains high at 13,695 despite factors affecting the industry.

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“While global deliveries this year are slower than originally expected, there remains strong international demand for modern, fuel efficient aircraft and we expect record production rates to return in the years ahead,” ADS chief executive Paul Everitt commented.

He continued: “Aerospace businesses in the UK have a fantastic opportunity to develop and manufacture the next generation technologies that are set to help the industry play its part in achieving ambitious emissions reduction targets.

“This can bring increasing prosperity to communities across the country and tackle the global challenge of climate change, if UK aerospace remains attractive to investment and the home of innovation.

“To make sure this opportunity is not lost, the Government must prioritise a future relationship with the European Union that preserves the frictionless trade and regulatory alignment this industry has relied on to achieve its annual value to the UK of £36 billion.”

ADS Group www.adsgroup.co.uk