FEBRUARY 29TH, 2016
CIT Aerospace: Twin-Aisle Evolution Creates Opportunities for Aircraft Owners and Passengers
NEW YORK—(BUSINESS WIRE)—A generation shift in technology is spawning the twin-aisle evolution. In this decade, eight twin-aisle types will enter into service. Both new and used aircraft types are creating opportunities for airlines to evolve their business model, increasing travel options for passengers. These are some of the observations shared in “The Twin-Aisle Evolution” (www.cit.com/twinaisle), the latest piece of market intelligence from CIT Group Inc. (NYSE: CIT), a global leader in transportation finance. The report is by Steve Mason, Vice President, Aircraft Evaluation and Strategy, and James Morrison, Assistant Vice President, both of CIT Aerospace, a division of CIT.
“Recent attention given to the availability of used twin-aisle aircraft has demonstrated a critical point: size matters,” said Mason. “Small and intermediate twin-aisles are the right-sized aircraft to expand international networks. Lower trip cost and less revenue risk appeal to a broader operator base, supporting a secondary market. Sophisticated owners of twin-aisle aircraft will leverage connections and technical expertise to create value in transitioning current generation aircraft and placing new-technology types.”
Some of the other trends discussed in the report include:
Generational Shift in Technology: A generation shift in technology is spawning the twin-aisle evolution. As the 767, 777-300ER and A330ceo approach the end of production, the improved performance and economics of new-technology types, such as the 787, A350 and A330neo, are enabling service to new markets by new airline business models.
More Non-Stop Routes: Boeing promotes the 787 as having already opened 90 new non-stop routes — with less than one-third of ordered aircraft delivered. The improved performance and operating economics of new-technology aircraft enable direct connections for city pairs that were previously served by one-or more-stop itineraries. Network opportunities enabled by new-technology aircraft allow carriers to differentiate their service from competitors, growing revenues while reducing costs.
The Sweet Spot for Aircraft Size: Small and intermediate twin-aisles, such as the 767, 787, A330 and A350, have broad appeal. With the right size to either feed international gateways or serve point-to-point markets, a variety of airline business models deploy these aircraft. New-technology types offer the range capabilities of current generation large twin-aisles at a fraction of the trip cost.
The End Result – Growth and Choice: Instead of siphoning travelers from established carriers, new airline business models will open international travel for a new class of passengers. A diversity of carriers will offer improved global links at competitive fares with passenger experiences tailored to a variety of price points. Network carriers, Low-Cost Carriers (LCCs) with international ambition and LCCs with a home market focus will all have growth opportunities in an expanding market.
Individuals can download a free copy of “The Twin-Aisle Evolution” at www.cit.com/twinaisle.