The aircraft and engine order intakes plunged in May.
Since last November there have been relatively large monthly orders for both aircraft and engines. In the six months to the end of April, for example, there were orders for 1,232 aircraft and 2,092 engines. Both figures are considerably larger than the order intakes in the six months to the end of April last year. In May, the aircraft and engine order intakes didn’t just drop, they plunged to the extent that less than half the number of aircraft and engines ordered in May last year were ordered this time.
There are often very good reasons why orders drop by a significant amount. The start of a year is often not particularly flush with orders. The start of a pandemic, as the industry so recently saw, has a dampening effect. A big armed conflict like a Gulf war usually squashes demand for commercial air transports. Then there are things like airlines being fully ordered or leasing companies already having more aircraft on their books than they can place with customers. The month before a major international air show is never very good despite the fact that the manufacturers always insist that they never hold orders over for the event.
May is not the start of a year and the pandemic has been running for some time. There is an armed conflict but it is localised. Tragic, but localised. Airlines are never really fully ordered – they plan years ahead and always keep an eye on the need to replace older, less efficient aircraft. Leasing companies also plan years ahead and have a shrewd idea what their customers want and when they probably want new aircraft. Farnborough is in July. It is possible that some orders that might have been announced in May are being held over for that. Some orders that might be finalised in June might also be held over for Farnborough.
What is puzzling is why there has been such a large drop in both aircraft and engine orders especially since ordering in both segments had been relatively strong for the previous six months. The May aircraft order intake of 36 was the lowest monthly intake since October last year and it was the fourth lowest intake in the last 12 months. It is the same with engine orders: The May intake of 74 engines was the lowest since last October and it was also the fourth lowest in the last 12 months.
Just 15 single-aisle aircraft were ordered in May, the lowest for a single month since January last year when there were no orders at all. There were orders for 30 single-aisle engines in May, the same number as in October last year so it was the joint lowest monthly intake in the past year. For the first time in over a year more widebody aircraft were ordered than single-aisles. Twenty one widebodies were ordered in May which was actually the second largest number so far this year. There were orders for 44 widebody engines during the month, the third largest number so far this year and a huge improvement on the 12 ordered in March and again in April.
It is probably safest to just put the low May order intakes down to the fact that this is an industry which periodically springs the sort of surprises that nobody was expecting.