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Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, Washington. Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, Washington.


Airbus, Boeing & Entire Supply Chain Are Threatened By Deepened Pandemic Impacts



For many years, aircraft manufacturers and suppliers in the upstream of the aviation supply chain enjoy higher protection due to technical barriers, and the level of competition in the industry is much lower compared to the lower end of the supply chain. However, the COVID-19 pandemic has caused a large-scale blow to the demand side of air transportation, making it difficult for aircraft manufacturers and suppliers to escape.

Since February, the COVID-19 pandemic has swept the world. As the closest link in the aviation industry chain to public travel needs, airlines bear the brunt. As the air transport markets of various countries are shut down like dominoes, an unprecedented large-scale grounding of the global fleet is taking place. According to Cirium’s updated data on April 17, 64% of the world’s 26,000 aircraft in service are grounded. As can be seen from industry figures, the current A330, A340 and B787 series grounding ratios of the wide-body aircraft have reached 90%, and due to the busy cargo aircraft, the B777 grounding ratio is slightly lower, about 75%. Also, more than half of the A320 and B737 series of narrow-body aircraft are grounded. Due to the possible deep damage to the global economy caused by the pandemic, the depression is expected to last longer, and it is difficult for air travel to recover as before in a short period.


At present, the damage to Airbus’ commercial aircraft orders has begun to appear, and the aircraft delivery volume has also been greatly affected by the pandemic. In the first quarter of this year, Airbus cancelled 66 aircraft orders, with a net increase of 290 orders and a monthly average net increase of 97, which was higher than last year’s monthly net orders for 66 aircraft. Net orders include 248 A320neo, 42 A220 and 4 A350, while cancelled orders include 29 A320neo, 16 A220, 17 A350 and 34 A330neo. However, if we only look at the March data, Airbus received a total of 60 gross aircraft orders, while 39 aircraft orders were cancelled, and the net order volume was only 21, far below the average of 66 aircraft per month last year.

In terms of delivery, Airbus originally planned to deliver 880 aircraft in 2020, slightly higher than the 863 aircraft delivered in 2019. However, in the first quarter, Airbus delivered a total of 122 aircraft, including 31 in January, 55 in February, and 36 in March. The three consecutive months of delivery were lower than the average of 72 in 2019. Delivery level. The aircraft delivered included 91 A320neo, 14 A350, 8 A220, 5 A320ceo, and two A330ceo and A330neo each. In late March, Airbus’s factories in France and Spain were shut down due to the pandemic. Airbus’ original production and delivery plans were disrupted. At the end of March, it announced the cancellation of the original 2020 production plan and delivery plan. Aviation analyst Sandy Morris predicts that Airbus’ delivery this year will likely drop to 650, and it may drop to 600 in 2021.

DeliveriesCancellationsNet OrdersBacklog
Airbus orders and delivery in the first quarter of 2020

As of March 31, Airbus had 7,650 reserve orders, including 6,220 A320, 529 A220, 323 A330, 569 A350XWB and 9 A380, this is still a positive increase compared to 7,482 reserve orders at the end of 2019. After the outbreak, due to tightened airline funding and declining travel demand, the market’s demand for new aircraft will also decline, and the number of new orders is expected to decrease significantly. The current situation may be just the beginning.

Although the impact of the pandemic is not very obvious from the perspective of the number of aircraft orders, the market will remain pessimistic after the pandemic has become a consensus in the industry. Aircraft demand is expected to shrink in the future. To this end, Airbus has announced a reduction of one-third of its output to adapt to market changes. Its most popular single-aisle aircraft A320 production will be reduced from 60 per month to 40 per month. For dual-aisle aircraft, the monthly output of the A350 will be reduced from 10 to 6, and the average monthly output of the A330 series will be reduced from about 4 to 2. According to Reuters, this is Airbus’ largest production adjustment to date. At the same time, Airbus’s measures to reduce production also brought the question of whether the A380 will be stopped in advance. The airline that operates the largest A380 fleet, Emirates, has significantly reduced its routes, and its business model of using Dubai as a hub to deploy a global route network may be severely tested in the future market environment. Guillaume Faury, CEO of Airbus, said that “it was too early to make any decisions on individual products.”. As for Airbus’ production cut, “Manufacturers are always very careful about changes in production rates in either direction,” said Sash Tusa of Agency Partners. “They will not change unless they can sustain the rate for two to three years.” Investors watch production rates closely as a guide to future profits and cash flow. It can be seen that Airbus’ decision to reduce production implies Airbus’ expectation that the market demand for the aircraft will remain sluggish for a long period of time in the future, and it also ends the period of continuous increase in Airbus’ output over the past decade.

While reducing production to adapt to changes in market demand, Airbus still focuses on maintaining flexibility in responding to future markets. They maintain daily information communication with their suppliers, including A330 and A350 engine suppliers Rolls-Royce, and A321 neo’s Leap engine supplier Safran France, in order to obtain the latest situation of the suppliers and prepare for recovery at any time. Guillaume Faury, CEO of Airbus, said that he could not predict when rates would rise again, as there remained too much uncertainty about the duration of the crisis. “It is not unlikely things will get better in 2021 but we don’t know exactly when.” At present, Airbus’s French and Spanish factories have been partially resumed.

Airbus think they have a more robust financial base to cope with this protracted crisis. As of December 31, 2019, Airbus held 12.5 billion euros in cash (Net Cash) and 3 billion euros in credit facilities (RSCF), and 22.7 billion euros of cash was invested in high-rated securities. Financing Liabilities is 10.1 billion euros, and its available working capital is 25.7 billion euros. At the same time, Airbus also announced the suspension of shareholder dividends to retain 1.4 billion euros of funds, and postponed employee pension payments. Airbus recently also received another 15 billion euro credit line, of which 5 billion euros are current credit lines, making its current total liquidity has exceeded 30 billion euros.

In addition to the funding methods that have been implemented, Airbus has also retained “back-up methods” in case of unexpected needs. Since Airbus once acquired a German bank as Airbus Bank in 2014, Airbus can use some financial means to maintain cash flow. In addition, Airbus said it can also obtain funds through bond issuance. Airbus has not applied to the government for large-scale capital assistance, but Airbus is maintaining communication with the French and German governments, or will participate in the government’s existing assistance projects to pay the wages of workers who have been furloughed. Airbus has a total of 135,000 employees worldwide, and salary expenses account for about 20% of its total cost. Airbus has not yet proposed any layoff plan.


The 737MAX incident has caused Boeing’s total delivery volume to drop by 53% in 2019, and the impact of the 2020 pandemic is worse. Boeing cancelled 196 aircraft orders in the first quarter, with a net loss of 147 aircraft (excluding the 160 aircraft that were removed from the list due to ASC 606 in the first quarter). The model with the most serious cancellations was B737MAX. Customers including Air Canada, Gol Airlines, Smartwings and Avolon cancelled a total of 191 orders for 737MAX. Another 4 B787 and 1 B777 aircraft orders were cancelled. Boeing delivered a total of 50 aircraft in the first quarter, and the average monthly delivery volume of 17 aircraft was much lower than last year’s average monthly delivery volume of 31 aircraft. As of March 31, the number of Boeing aircraft reserve orders was 5,428 (if there were 379 aircraft orders removed by ASC 606, it would be 5049 aircraft). In addition to commercial aircraft, Boeing’s military aircraft business has also been greatly affected. Boeing delivered 39 military aircraft in the first quarter, compared with 60 in the first quarter of 2019.

DeliveriesCancellationsNet OrdersBacklog
Boeing orders and delivery in the first quarter of 2020

The factory shutdown caused by the pandemic is the main reason for affecting the delivery schedule of Boeing. Boeing closed the commercial aircraft plant in Puget Sound on March 25 due to confirmed positive test of coronavirus in the factory and then announced on April 2 that it will close the military plant in Philadelphia for at least two weeks. After a lapse of nearly a month, at present, Boeing announced that it plans to resume production at some factories on April 20, and restart production of B737, B747, B767, B777, B787 and other aircraft models, 27,000 employees will return to work, but Boeing’s South Carolina plant will still be shut down.

In order to adapt to the decline in demand caused by the pandemic, Boeing has proposed a plan to lay off 10% of its employees globally, including the voluntary departure of employees, early retirement and termination. Boeing has 160,000 employees worldwide, and people familiar with the matter said that most of the employees to be laid off may come from the commercial aircraft business segment. In a letter to all employees on April 2, Boeing CEO David Calhoun proposed to solicit voluntary leavers from the entire company and distribute compensation for those who leave. The layoffs suggest Boeing’s pessimistic expectations for the next few years and concerns about the uncertainty of the pandemic’s development, David Calhoun said, “It will take time for the aerospace industry to recover from the crisis, when the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different. We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come. It’s important we start adjusting to our new reality now.”

In response to the outbreak, Boeing also used various methods to raise funds. Before the outbreak, because Boeing 737MAX was grounded worldwide, Boeing was already plagued by tight cash flow. From 2018, the profit fell by nearly 12 billion US dollars, and the loss in 2019 was nearly 2 billion US dollars. The advent of the pandemic has made Boeing’s financial problems more serious. On the one hand, Boeing previously submitted US $ 60 billion in aid funds to the US government on behalf of the US aviation manufacturing industry, and is waiting for the government to arrange specific assistance plans; on the other hand, Boeing also requested Lazard and Evercore to seek investment in the capital market. The US government’s “two trillion dollars” aid plan (CARES Act) also includes $17 billion in targeted rescue funds for the defence military industry, and Boeing may also benefit from it. Analysts believe that Boeing needs to raise at least an additional 20 billion US dollars to be basically enough to cover all costs and debts this year.

Since the beginning of the year, Boeing’s market value has been venting all the way. On April 10, Moody’s Investors Service has downgraded the senior unsecured debt ratings of Boeing and its finance arm Boeing Capital Corporation from ‘Baa1’ to ‘Baa2′ and the outlook is negative, Moody’s senior vice president and lead analyst Jonathan Root said: “The coronavirus is likely to become a significantly greater pressure point on Boeing than the long-running 737 Max crisis.” Moody’s said that the “near-term impact of the coronavirus is acute. The potential for order deferrals and cancellations is a material risk factor, fueled by expected significant reductions in airlines and aircraft lessors’ fleet sizes and/or orderbooks for indeterminate time periods.”

The pandemic has had a huge impact on upstream companies in the aviation industry, but at the same time, the business of these manufacturing companies is also more diversified. When the civil aviation sector is seriously affected, the stability of other business sectors may become an important factor that determines the survival of enterprises: Airbus and Boeing have both civil and defence business modules. Although the civil aviation market is currently in a downturn, the orders for defence military industry may be more stable; and Roll-Royce and GE are involved in a wider range of business areas. It is understood that Rolls-Royce’s defence and power system business segments are affected by the pandemic, and GE’s business in the fields of power, new energy and health will also effectively complement the aviation field. We will continue to pay attention to the follow-up operations of these representative enterprises in the upstream of the aviation industry chain.

<strong>Institute For Aviation Research</strong>
Institute For Aviation Research

This article is authorised and translated from IAR’s research publication, the Institute for Aviation Research is an independent think tank that promotes research into aviation. For more info please go to their website below.

Albert K. Field Albert is my name, and travel the world is my game. I began my passion for travel at a very young age, I started this website as a strong means to further explore the world of frequent flyers programs (FFP). The relationship between customers and service providers in the aviation and hospitality industry always seems to be in opposition, however, since the introduction of United Airlines’ Frequent Flyers Programm since 1972*. This has significantly eased the middle spectrum between 2 parties. While the aim of airlines is still to generate more revenue; but for us,as consumers, are also given the opportunity to participate in the bargaining and exploiting from service providers. Living in a world of globalization where big data becomes vital for simulating successful economical activities, most of us will have to travel to other locations whether willingly or unwillingly, while you hearing all this fascinating stories about others, In fact, you too, can blend into the trend. It may not sound like how media illustrates, but indeed there are possibilities for us to have more spontaneous travel without getting held back by financial situation. My website consists of reviews of airline premium cabin products,airport lounges and stay reports of 5-star hotels and their executive lounges across the globe. In addition to all of that, I care the most about their frequent flyers program and loyalty program, which also includes banking partners. Plus, I spontaneously put up reviews and news update regarding premium water brands and restaurants. The purpose of this website is to share all of this information with my audience as well as inviting you to be part of my journey.



  1. World of Boeing

    May 3, 2020 at 9:48 pm

    Wow, nice article.

  2. Aircraft Leasing Company

    May 20, 2020 at 9:31 pm

    It’s all so deserving for them, since they grabbed all of decision making power in the first place, when it just looks like all business were booming.

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Route Network

SAS To Double Its Capacity In June



Parked SAS Fleet
As more and more countries are easing travel restrictions, SAS, the flag carrier of 3 nordic countries which has cancelled nearly all flights since March, has released a statement in which it will join a growing number of its European counterparts to resume flights to several destinations from June onwards. These routes are primarily domestic flights within and between the Scandinavian countries, with flights to New York, Chicago and Amsterdam from Copenhagen are also set to resume. Scandinavian Airlines’ decision on resuming flights and adding existing service frequencies in all three countries means that SAS is set to double its capacity in June, increasing from having the equivalent of 15 aircraft in service to 30.

SAS has taken a number of measures to ensure your safety and well-being on board.
SAS has taken a number of measures to ensure your safety and well-being on board.

From Copenhagen, SAS is resuming international flights to Amsterdam, New York and Chicago.

SAS has already restored all of its domestic destinations in Norway, it will now add two more Norwegian destinations to Copenhagen from Bergen and Stavanger and one of its strategic oil route from Stavanger to Aberdeen.

In Sweden, SAS is adding four domestic destinations from Arlanda; Malmö, Ängelholm, Kalmar and Skellefteå. SAS is also resuming 2 international routes from Stockholm to Helsinki and Turku, in Finland.

Date of resumptionRoutes
From 1 JuneARN-SFTStockholm – Skellefteå
From 2 JuneCPH-AARCopenhagen – Aarhus
From 8 JuneCPH-AMSCopenhagen – Amsterdam
CPH-BGOCopenhagen –  Bergen
CPH-SVGCopenhagen – Stavanger
SVG-ABZStavanger – Aberdeen
ARN-HELStockholm – Helsinki
ARN-TKUStockholm – Turku
ARN-MMXStockholm – Malmö
ARN-KLRStockholm – Kalmar
From 10 JuneCPH-EWRCopenhagen – New York
CPH-ORDCopenhagen – Chicago
From 15 JuneARN-AGHStockholm – Ängelholm

Updates To SAS Traffic Operation, June 2020

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Route Network

Aegean Airlines Gradually Resumes Flights With Limited International Frequencies



Aegean Airlines A320 Fleet
Greece has entered the third phase of “unlocking” this week, and domestic and international flights have gradually returned. Aegean Airlines issued a statement on May 18, announcing a series of measures and flexible ticketing policies. Aegean Airlines’ president said in an interview that the company suffered serious losses due to the COVID-19 pandemic. This year may be the worst year in the company’s history. At present, Aegean Airlines has resumed flights between the main mainland and Crete, and other islands will resume flights in the next few weeks. In terms of international flights, Aegean Airlines will first resume round-trip flights between Athens and Munich, Frankfurt, Geneva and Zurich, and increased frequencies for their only non-suspended route to Brussels.

Aegean Airlines A320
Aegean Airlines A320

AEGEAN, a Star Alliance member airline, has been maintaining all domestic destinations with limited frequency flight service since 26 March, in an effort to facilitate minimum essential for the island’s needs and a small number of weekly flights from Athens to Brussels in order to maintain the country’s connectivity with the EU’s administrative centre.

Aegean Airlines also operated numerous humanitarian cargo flights for medical and pharmaceutical supplies transportation from China to Greece and Cyprus, in cooperation with the relevant authorities, the airline has operated repatriation flights from various international destinations. 

AEGEAN gradually adds frequencies on domestic network

Following the gradual ease of travel restrictions within Greece and entry regulations to other European countries gradually to be announced, AEGEAN will be enhancing connectivity in its domestic network.

As of May 18th, AEGEAN will be gradually increasing capacity to Heraklion, Chania, Thessaloniki and Alexandroupolis, while additional frequencies will be added to Rhodes, Corfu, Mytilene, Chios, Samos and other domestic destinations, as of May 25th.   

AEGEAN will gradually restore international operations

By the end of May, AEGEAN will gradually restore international operations to some major European destinations. In particular, AEGEAN plans to restart operations from its Athens hub to Munich, Zurich, Frankfurt and Geneva, initially within a limited frequency. At the same time, more flights will be operated to Brussels, which is the only international destination that hasn’t been suspended. 

AEGEAN is willing to gradually restore its network with extreme cautiousness, as stated in the airline’s press statement. While fully respecting the tremendous national effort to control the COVID-19 outbreak within the country, Aegean Airlines’ utmost priority is still to assist authorities in developing relevant health protocols for both passengers and crews.

AEGEAN has already enhanced the increased precautionary measures while boarding and during a flight in preparation for the resumption of flight services, including the mandatory use of a mask during flight, alongside the aircraft cleaning and disinfection processes, and is in close cooperation with the relevant authorities in order to implement additional safety measures with respect to social distancing and sanitation, upon official announcements.

An Aegean Airlines Airbus A320neo in its brand new livery, Greece, May 11, 2020.
An Aegean Airlines Airbus A320neo in its brand new livery, Greece, May 11, 2020. Image Rights: REUTERS/Alkis Konstantinidis

Board Chairman of Aegean Airlines Eftychios Vassilakis told Reuters during an interview stated that Aegean Airlines “burns” 40 million euros every month, and the fixed expenses only cost 25 million euros per month. “The company” burns money “in order to continue flying. Vasilakis said that during the crisis, the Greek government provided financial support to Aegean Airlines. As “You cannot afford to be one of the very few airlines in Europe that have not been helped.” But he did not specify the form and details of the funding.

By the end of the year, AEGEAN will be operating its whole fleet with 65 planes, including the first 6 Airbus A320/321neo aircraft, making it one of the youngest fleet in Europe. Vasilyakis also said that Aegean will be resuming 25% before July and 50% before September, under a best-case scenario,

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