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After Surge in Orders, Airlines Now Balk at Wide-Bodies

Credit...Eric Cabanis/Agence France-Presse — Getty Images

At the International Paris Air Show this week, much of the excitement at the aerial displays will come from the latest souped-up versions of the smaller Airbus and Boeing planes. But the chatter at the lavish dinners is likely to focus on a more worrisome topic: a recent slowdown in orders for the companies’ largest and most expensive jets.

As one of the longest upswings in sales in aviation history falters, Boeing has been forced to cut production of its giant 777 and 747-8 jets. And questions are mounting about how much longer Airbus will be able to keep building its mammoth A380, a double-deck plane that carries more than 500 people and often includes bars and showers for the highest-paying customers.

Analysts say several factors have come together to reduce interest in the planes, and some experts think the slide in orders could last several years.

High production rates created a glut of large jets, and the drop in oil prices has reduced business travel to and from the Middle East, where carriers like Emirates Airlines, Etihad Airways and Qatar Airways have been among the biggest buyers of 777s and A380s. President Trump’s proposal for a travel ban focused on Muslim countries, new security rules banning laptops on flights from the Middle East and the tensions between Qatar and its neighbors have all added to the problems.

To some extent, “it’s a day of reckoning, prompted by the troubles at these three carriers,” said Richard L. Aboulafia, an aviation analyst at the Teal Group in Fairfax, Va.

Mr. Aboulafia and others say the slowdown also reflects a more fundamental shift in the types of planes that most airlines want.

Since the introduction of the Boeing 787 Dreamliner in 2011 and the Airbus A350 XWB in 2015, airlines have embraced the idea of buying lighter, more fuel-efficient planes that seat around 300 people. This has enabled them to provide more nonstop flights and greater flexibility to adjust routes.

Though Airbus disagrees, Boeing and many analysts say the changes could spell the end for superjumbo planes like the A380 that have relied on funneling passengers through massive airport hubs.

“There is demand for the large end,” said David Wireman, an aviation expert at AlixPartners, a consulting firm based in New York. “It’s just not the superjumbo kind of concept.”

Boeing and Airbus are now coming out with slightly larger versions of the Dreamliner and the A350, and Boeing is developing more fuel-efficient versions of the 777, to seat 350 to 425 people, that will not be ready before 2020.

These new planes are blurring the lines in the traditional sizes of wide-body planes, and some airlines are holding back on orders to get the latest technology on the new 777.

“Has there been a slowdown? Has there been a hesitation for the bigger airplanes in the market?” said Randy Tinseth, Boeing’s vice president for marketing. “There’s no question, and we’ve made adjustments.”

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A Boeing 737 MAX 9 lands during its first flight at Boeing Field on April 13, 2017, in Seattle.Credit...Stephen Brashear/Getty Images

Boeing makes only six 747s a year, and it sells most of them as cargo freighters rather than as passenger jets. The company is also cutting deliveries of the existing 777, its most profitable plane, to just over 40 in 2018 from 99 in 2016.

But “when you get into the 2021-2022 time frame, you really start to see another replacement wave coming,” Mr. Tinseth said. “You’re going to see a bunch of wide-bodies start to hit 25 years of service, and I think that will help spur production when we get into the next decade.”

Despite the problems now, Boeing and Airbus remain firmly in control of the market for commercial planes across the world. Passenger traffic continues to increase as more people in developing countries move into the middle class, and Boeing plans to release a study at the air show predicting demand for 9,000 new wide-bodies over the next 20 years.

Boeing has typically topped Airbus in the sale of high-value wide-bodies, thanks to the popularity of the 777 and a record-setting surge of advance orders for the 787 Dreamliner, the first commercial plane made substantially of lightweight carbon composites.

But Airbus has pulled ahead of Boeing in orders for smaller planes by moving faster to install new engines and other improvements on its A320 and A321 jets than Boeing has on its venerable 737 line. Airbus plans to fly its latest enhancement, the A321neo, at the air show, and Boeing will counter with a flight of its re-engined 737 MAX 9. Boeing said it also may formally start work on a longer 737 MAX 10 to help it catch up.

Mr. Tinseth acknowledged that Airbus had “sold more, no question about it” in that category.

So much of the jousting between the two rivals is shifting to the future of the A380, the giant four-engine Airbus that costs about $210 million each.

Emirates Airlines has been by far the largest customer for the A380, buying 20 of the 28 planes that Airbus delivered in 2016. Airbus announced last July that it would cut production to 20 A380s in 2017 and 12 a year after that. The program took another hit in December when Emirates said it would delay six of the purchases it had planned for this year and six more next year.

Mr. Tinseth said Boeing believed that it would be very hard for Airbus to actually sell roughly four dozen A380s that other airlines have ordered.

“What is leaving the market, I believe, are those really big four-engine airplanes, like the A380, that just don’t have the economics to compete,” he said.

John Leahy, the marketing chief at Airbus, responded that “if A380 sales are soft, which is true, you’d have to admit 747-8 sales are nonexistent.”

Mr. Leahy said Airbus expected renewed interest in the A380 as airports become more congested in the 2020s. The company’s goal, he said, is to keep building one plane a month — “or maybe even lower if we had to” — and wait for the turnaround in the market.

The total number of airline miles flown by paying passengers “has doubled every 15 years since the dawn of the jet age,” he said. “My competitor out there in Seattle says, ‘Oh, we’ll just have more flights.’”

But many airports in the United States, Europe and Asia can’t handle more flights, he said, “so we have to move to bigger aircraft.”

Mr. Leahy said Airbus was positioning its new A350-1000, which will also fly at the air show, as an alternative to Boeing’s redesigned 777, known as the 777X, for airlines that did not need quite as many seats. The 777X made a big splash when it was introduced with a blizzard of orders from the Middle Eastern airlines in 2013, he said, but sales “have been pretty soft since then.”

A version of this article appears in print on  , Section B, Page 6 of the New York edition with the headline: After a Surge in Orders, Airlines Balk at Big Jets. Order Reprints | Today’s Paper | Subscribe

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