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Do airline dreams come true? Part 1


As we commence 2025, the story is that every airline is desperate for new aircraft to meet growth or to replace older aircraft, or both.

Ascend Consultancy has been providing values insights for six decades.
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Richard Evans airline consultant

Team Perspective

Richard Evans
Senior consultant
Cirium Ascend Consultancy

READ PART two OF, Do airline dreams come true?

As we commence 2025, the story is that every airline is desperate for new aircraft to meet growth or to replace older aircraft, or both. Many have very ambitious expansion plans. It seems an opportune moment, then, to consider how often airlines achieve goals for rapid expansion, and the factors that might help realise their dreams.

For this analysis, the fleet and backlog data includes passenger single-aisles and twin-aisles, from all manufacturers.

The airlines with the largest backlogs today are shown below, and then contrasted with the position a decade ago.

They are a mixture of the largest carriers, with a higher share of replacement demand, and airlines in fast-growing developing countries.

As at the end of 2024, there were 13,800 aircraft on order for airlines, compared to a total fleet of 23,600 passenger aircraft. Therefore the backlog-to-fleet ratio is around 0.58:1. Note that the order total includes just over 1,000 aircraft that are for unannounced airline customers, many of which are likely destined for Chinese carriers and lessors. Ten years ago, the fleet stood at 17,300, with a firm backlog of 10,300 aircraft. The ratio was therefore almost identical to today, at 0.59:1.

Chart 1: Firm order backlog at December 2024

Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis

It is obvious that most of these airlines have backlog-to-fleet ratios well above the industry average, with several well above one. Thus, they have sufficient aircraft on order to replace the entire fleet in service today, or to support huge growth. Three of the listed carriers are based in India, which Cirium Ascend Consultancy expects to be the fastest growing market over the next 10-20 years, as discussed in previous thought leadership. Three are the major Chinese carriers, who have relatively small announced backlogs. The four largest US airlines are present, with quite modest backlog-to-fleet ratios between 0.28 and 0.69, plus low-cost carrier (LCC) Frontier Airlines, with a ratio of 1.19.

Wizz Air Group has the most ambitious plans, with a backlog-to-fleet ratio of 1.34.

Europe is represented by the three major LCCs, plus the Lufthansa Group. Within these, Wizz Air Group has the most ambitious plans, with a backlog-to-fleet ratio of 1.34. In contrast, Ryanair has a relatively small backlog, and is planning on slower growth over the next few years. Turkish Airlines, including its subsidiary Ajet, has the seventh largest backlog.

There are two Middle East carriers in the ranking. These are Emirates, and Saudia Group (including its LCC subsidiary Flyadeal). Although outside the top 20, the combined order backlogs for Qatar Airways, Riyadh Air, Flydubai, Air Arabia, Etihad and Flynas now amount to nearly 700 aircraft, leading to concerns about future overcapacity in the region.

The remaining three carriers are in Southeast Asia, and are primarily seen as LCCs. Their order backlogs have largely been in place since before Covid, and have seen several deferrals and order restructurings.

A review of these airlines and the history of the Gulf connector airlines may be useful to understand the context of airline ‘mega-orders’ and the nature of rapidly-growing markets.

The situation a decade ago was not altogether different to today. IndiGo is there, and has seen its fleet more than quadruple since 2014, from 88 to 382 aircraft. The four US Majors were listed, as were two of the Chinese ‘Big 3’, the Lufthansa Group, and Turkish Airlines. There were two airlines in Latin America, not represented today. This market has seen considerable upheaval and airline bankruptcies during Covid.

Chart 2: Firm order backlog at December 2014

Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis
Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis

What stands out is Lion Air and AirAsia Groups had the largest backlog in 2014, in terms of aircraft units. They had backlog-to-fleet ratios of 3.54 and 2.03 respectively, in anticipation of huge market growth. Both companies, but especially AirAsia had plans to grow their brands across the region, using JVs or minority stakes in multiple countries. 

The second highest ratio was Norwegian, which had similar ambition to break out of Norway to expand across Europe, and to launch long-haul services.

It is well-documented how the latter plan brought the airline down, but it also struggled to compete with the bigger players.

The three Gulf carriers were all present in the table in 2014. At the time, Emirates, Qatar and Etihad had a combined fleet of 450 aircraft, with 685 on backlog. Flydubai, since merged into the Emirates Group added a fleet of 88, with 127 on order. Thus, the combined backlog-to-fleet ratio was around 1.5, signifying how each carrier aimed to continue growing rapidly.

Case Study – Emirates

Emirates had a fleet of 219 passenger aircraft in 2014, being easily the largest of the Middle East airlines. It had grown rapidly, and its hub at Dubai International Airport (DXB) was seen as becoming full around 2015-2020. Dubai had announced plans for a massive new airport, now known as Dubai World Central – Al Maktoum International (DWC) in 2005. Construction started in 2007, with the first freight service landing in 2010, and the passenger terminal in 2013.

The original DWC plan envisaged it becoming the hub for Emirates by 2018, with an eventual capacity of 150 million passengers and six runways.

This was to support plans to grow the airline to a fleet of 500-600 aircraft.

Things changed in 2011, however. It was decided to expand DXB to handle 90 million passengers. DWC growth was slowed, with it set to support Emirates switching its hub around 2025 instead. DXB handled 87 million passengers in 2023, and will exceed 100 million in 2025. However, DWC expansion is back on the rails, with the June 2024 announcement that it will replace the city’s existing gateway by 2034. All operations will move to the new airport, with plans for passenger facilities capable of handling 260 million passengers a year.

Chart 3: Emirates fleet and backlog 2000-2024

Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis
Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis

So, what has all this meant for Emirates and its competitors? The airline’s fleet has hardly grown since 2015, after having trebled in the preceding 10 years. Covid-19 had a major impact, with Emirates relying on long-haul international traffic. Airframer issues have impacted its plans too, with Airbus unwilling to further develop the A380, and Boeing suffering interminable delays on the 777X. It has been able to expand capacity somewhat, by use of larger aircraft.

Airlines often plan on the basis of growing faster than the market average. Airline A may plan on  gaining market share, or capturing more transfer traffic. However, so might Airline B and Airline C. The Middle East has not seen rapid GDP growth over the past decade, and remains geo-politically unstable. However, collectively, airlines were successful in building transfer hubs and also stimulating some local traffic and inbound tourist visitors. The success of Dubai led to Qatar and Abu Dhabi aiming to replicate this, with Bahrain and Oman looking to expand too. Today, Saudi Arabia is investing heavily in promoting itself and its airlines seek to expand rapidly.

Back in 2013, as well as Emirates’ plan to double its fleet, Etihad wanted to triple its fleet by 2026, and Qatar was looking ahead to the 2022 World Cup. LCC competition was expanding from Air Arabia, and locally Flydubai was independent of Emirates.

Chart 4: Middle East airline fleet expansion 2014-2024

Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis, selected airlines

Source: Cirium Fleets Analyzer, Cirium Ascend Consultancy analysis, selected airlines

Perhaps the biggest threat was to come from Turkish Airlines. It has a huge home market, offers shorter elapsed times from Europe to much of Asia, Africa and the Middle East, and was building airport capacity. Turkish Airlines had a fleet of 231 aircraft in 2013, and had just placed orders for 212 new aircraft. Its long-term plan was a fleet of 421 aircraft in 2021. It has largely achieved this. Despite some setbacks, it had a fleet of 440 by January 2024, when it outlined a Group plan to reach 950 aircraft by 2033.

Emirates has also seen growing competition from Indian and Chinese carriers on the Europe-Asia market, but has perhaps benefitted from capacity reductions from other Asian airlines, such as Thai, Malaysian, and Garuda.

This example shows how much can change in 10 years. External shocks and local economic upsets have played a part, but competition with other hubs, with other existing airlines, and the entry of new LCCs have all affected growth plans, with the result that many aircraft on order in 2013-14 have never been delivered. Plans must adapt, and Emirates has certainly been successful in doing this, including co-ordinating better with Flydubai. The Emirates Group delivered a solid profit in 2024, in contrast to many Middle East airlines, showing that rapid growth and shiny new planes do not necessarily go hand-in-hand with market success.

In the second part of this Team Perspective, we will discuss Southeast Asia, and consider what other factors influence order backlog developments.


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