The A321neo and A321 have dominated the upper end of the narrowbody market. Airbus
The A321neo and A321 have dominated the upper end of the narrowbody market.

How The A320 Overtook The 737, And MRO Implications

Airbus and Boeing’s rivalry for the narrowbody market is intense, and just a few factors have been a big factor in the competition for orders so far.

Printed headline: The People’s Plane

By many measures, the Airbus A320 has become the most popular aircraft family in the world. Although there are about 100 more Boeing 737s in service worldwide, that is only attributable to the existing fleet of the U.S. manufacturer’s legacy Classic equipment, while Airbus has sold more current-generation and new-engine narrowbodies.

According to the Aviation Week Fleet & MRO Forecast, there are currently 7,251 current-generation A320-family aircraft in service, versus 6,757 737NGs. Through 2022, meanwhile, Aviation Week expects Airbus to deliver 3,174 A320neos compared with 2,999 Boeing 737 MAX aircraft.

Airbus’ leapfrogging over Boeing in the most crucial segment of the aircraft market may owe as much to the European manufacturer’s marketing and strategic acumen as it does to the A320’s intrinsic qualities. In fact, the baseline 737-800 is marginally more popular with lessors and financiers than the A320, and when the numbers of each aircraft peak around 2020, there will be roughly 1,000 more 737-800s in service.

Airbus

The A321neo and A321 have dominated the upper end of the narrowbody market.

It is also worth noting that airlines rarely drop one manufacturer for another, due to the costs of switching fleets. Instead, Airbus has had great success selling A320s to startups in the booming low-cost carrier market around the world. The other big boost for the current-generation line was the A321, which has outsold its Boeing equivalent, the 737-900, by a margin of three to one.

Likewise, the A321neo has dominated the large-capacity narrowbody market against the 737-9 MAX. By 2022, Aviation Week expects there to be almost three times as many of the former aircraft in service, although Boeing is trying to win back some market share in this segment with the 737-10 MAX.

However, the Neo’s success has as much to do with timing as anything else. Embroiled in delays to the 787 program that were occupying most of its resources, Boeing belatedly launched the MAX in August 2011, six months after the A320neo. That interval might seem trivial, but at the time the market was desperate for a new narrowbody. and Airbus had already racked up 1,000 orders for the Neo before Boeing announced the MAX.

It is also sometimes argued that offering a choice of engines for Airbus narrowbodies—the IAE V2500 and CFM56 for the A320, the Pratt & Whitney PW1100G and CFM Leap-1A for the A320neo—make them more attractive to airlines and lessors than the 737NG or 737 MAX, which are limited to the CFM56-7B and Leap-1B, respectively. However, while it is true that most of the big lessors have ordered the A320neo with both engine types, a lack of choice never hurt the biggest-selling aircraft of all time, the 737-800. Furthermore, Boeing’s single choice has hardly been a poor one: The CFM56-5B/7B has proved to be astonishingly reliable, surpassing all expectations of airlines and even its manufacturer, while the Leap has suffered far fewer problems than the PW1100G.

Aftermarket Implications

Given the number of A320s in service, it is not surprising that operators in most parts of the world have a good choice of maintenance options for both airframes and engines. Maintenance check intervals for current-generation A320s are either flight-hour or calendar-based and range from A Checks at 750 flight hours to structural inspections at six- and 12-year intervals.

Aviation Week calculates that A320-family maintenance will be worth about $20.6 billion in 2018, with work on current-generation A320s and A321s accounting for about three-quarters of the market. The value of A320neo maintenance, meanwhile, will rise from roughly $650 million in 2018 to about $3.3 billion in 2022, although even then the first big wave of heavy maintenance will still be a few years away.

It’s a different story for the A320, however, which has a huge installed base of midlife and mature equipment that is staying in service longer, thanks to low fuel prices over the past five years. Aviation Week estimates that the overall MRO market for all A320 models will grow by about one-fifth in the next four years, reaching $24.5 billion in 2022. 

UK-based MRO Monarch Aircraft Engineering expects A320 maintenance volumes to grow 6% per year over the next five years, with modifications as well as overhauls likely to be in demand.

“The increase in aircraft entering the second phase of their maintenance cycles will offer opportunities for MRO to supplement the MPD [maintenance planning document] requirements with additional retrofit and cabin upgrade options,” says David Doherty, head of commercial services for Monarch Aircraft Engineering.

Maintenance costs are of course a notable part of any purchase decision by an airline. Monarch repairs the A320 and the 737NG, and Doherty says that turnaround times and maintenance costs are similar for both aircraft, although he also identifies “subtle differences” in the challenges posed by each.

“Sourcing spares materials from Airbus is marginally more expensive per check than for the Boeing product, but the supply chain for Airbus is more direct, which can translate into a lower logistical cost,” he says.

Doherty adds that the third-party spares market is less developed for the A320 than for the 737NG, although he believes this is changing as A320 operators are now benefiting from additional choice and lower material costs.

It is still too early to assess whether the A320neo or 737 MAX will offer lower life-cycle costs in the aftermarket, since engine maintenance could become more expensive if OEMs CFM and Pratt & Whitney grab significantly more MRO business than they have on current-generation platforms.

The good news for operators, however, is that both manufacturers have said they are committed to an open maintenance market. In July, after pressure from the European Commission, CFM signed a deal with the International Air Transport Association to that effect. Under the agreement, which covers CFM56 and Leap engines, CFM promises to license its engine shop manual to an MRO facility even if it uses non-CFM parts; to permit the use of non-CFM parts or repairs by any licensee; and to grant airlines and third-party overhaul facilities the right to use the CFM engine shop manual without a fee. 

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