Aerospace and Defence Update: Widebody replacement cycle supports rotation into OE from AM

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Aerospace and Defence Update: Widebody replacement cycle supports rotation into OE from AM

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Aerospace and Defence Update

Widebody replacement cycle supports

rotation into OE from AM

Industry Overview

OE momentum improving as AM risks building 08 June 2026

We see scope for the Civil Aero debate to shift from aftermarket resilience towards OE Equity

volume recovery, as Airbus delivery momentum improves after a soft Q1, and growing Global

support for a widebody replacement cycle providing clear mid-term visibility. The A320 Aerospace

and A350 orderbook remain overbooked vs our delivery expectations through the end of Benjamin Heelan >>

the decade. The conflict in the Middle East is putting pressure on fuel prices that do risk Research Analyst

pushing retirements higher in 2H26 which could weigh on legacy narrowbody Merrill+44 20Lynch7996 (DIFC)5723

aftermarket revenues 2027-28. We continue to see a period of OE outperformance. benjamin.heelan@bofa.com

WB replacement cycle provides OE visibility mid-term DavidResearchHolmes,AnalystCFA >>

Widebody production at Airbus and Boeing remains well below the 2014–19 average, but MLI+44 (UK)20 7995 1077

a meaningful ramp-up is expected through 2030. Even so, our modelling suggests the david.a.holmes@bofa.com

market is likely to remain structurally undersupplied, driven primarily by fleet ageing Lorenzo Di Patrizi >>

rather than cyclical demand. More than 1,000 widebody aircraft are already over 23 Research Analyst MLI (UK)

years old, with a further 100–130 reaching that threshold annually over the next five +44 20 7995 7626

years. This implies that over 20% of the in-service passenger widebody fleet will be due lorenzo.dipatrizi@bofa.com