Airbus CEO Guillaume Faury recently reiterated the company is fully focused on launching a successor to the A320neo family by the end of the decade for entry into service in the second half of the 2030s. A recent survey by McKinsey and Aviation Week of more than 135 companies found that broader commercial-aviation supply chain respondents were less confident about the business case for a next-generation single-aisle (NGSA) aircraft. Their top concern focused on development costs—up to $25 billion, or a payback period of ten to 12 years—with technical feasibility following closely behind.
In last year’s survey, a surprising 84 percent of respondents predicted that an NGSA aircraft would be fielded by 2035 or earlier. However, an extended ramp-up timeline without a corresponding lag in NGSA would lead to what we call the “messy middle”; it would also create many challenges for suppliers, including how to prioritize investment and human capital between current-generation and next-generation development and how to pay back the investments made in the ramp-up.
This year’s survey respondents continued to be tepid on the prospect of OEMs achieving their current-generation production goals. On average, 81 percent of those surveyed expressed zero to moderate confidence in the ability of airframers to hit their production targets for 2026 and 2027. Any delay could require significant supply chain investments in current-generation production for at least the next two years.
We believe this hesitancy reflects not just a growing realization across the industry that next-generation airlines will cost substantially more but also a deeper understanding that the foundational issues uncovered over the past six years were more challenging and pervasive than previously thought. It could also be an acknowledgement of the need to reset trust between the players across the value chain. These factors complicate an already mixed business case: Current estimates suggest an evolutionary NGSA may deliver a less-than-dramatic 12 percent increase in fuel efficiency over present narrowbodies while production costs may be up to 30 percent higher.
Further, our survey revealed pervasive uncertainty about the expected entry into service (EIS) of NGSA aircraft. Since our 2024 survey, the timeline has shifted further into the future by three to four years on average, across the value chain (exhibit). Half of those surveyed anticipate EIS by 2034 or later. Engine OEMs are particularly misaligned with airframers, operators, suppliers, and maintenance, repair, and overhaul. Their view has shifted the most (eight years on average), and most expect NGSA aircraft EIS in 2040 or later.
Over the past five decades, the flying public has enjoyed advances in aircraft technology that have increased range, comfort, and efficiency—at greatly reduced (real) cost. That trend could be ending, raising critical questions: Does demand from operators match the economic realities of designing and building a clean-sheet narrowbody aircraft, and can the business case close?
For more details on the factors in play and what they mean for industry stakeholders, download the full article here.
