The reduced price of fuel could be a threat to parts of the order backlogs of both Airbus and Boeing, although analysts differ on how deep the impact will be.

“People mistakenly believed [fuel prices] will be up forever,” Avitas Senior Vice President Adam Pilarski says. This prompted carriers to secure access to as many fuel-efficient aircraft as possible as a kind of a life insurance and to be protected in relative terms vis-à-vis the competition. It’s “an expensive form of hedging,” Pilarski says.

That helped drive the strong demand for and launch of the A320neo, A330neo and 737 MAX. With fuel costs halved in the last year, the main argument for ordering these aircraft—lower operating costs—becomes less important, Pilarski argues. “Obviously you don’t have an immediate impact,” he adds.  “It will take time for reality to sink in.”

Pilarski warns that there is “still a huge overhang” in orders. He points to the fact that both Airbus and Boeing have taken in orders for twice as many aircraft as they have produced for two consecutive years, and predicts that the so-called “book-to-bill” ratio will be “below one” in 2015.

Pilarski has no doubts that there has been an order bubble. “The question is how will we deflate the bubble?” he asks. “With a sharp needle or will there be slow leaking?”

In the sharp-needle scenario, airlines would cancel a great number of orders. If the bubble only has a small leak, the industry may simply see a few years with much fewer orders. “It does not have to become a disaster,” Pilarski concedes.

Ed Greenslet of The Airline Monitor agrees and disagrees. He agrees that the number of orders for new aircraft will likely come down. But he says that “there is no evidence in history” of a correlation between oil prices and orders. If orders do go down it is because “they must drop going to an average over time,” he explains. “They have been at a peak for four years. It’s just the way the beast works—in cycles.”

He points to the fact that the price of fuel almost tripled between 2004 and 2014, but deliveries increased by 67% over the same time. And there were no new aircraft types available that would have been more fuel efficient than the ones in service before the rise in fuel prices. So while new orders may fall at a time of falling oil prices, he argues that there is no link between the two. To him it is just a coincidence.

Greenslet believes that airlines will become more profitable in the short term and they will also lower fares once their current hedging contracts expire that bind them to fuel prices higher than the current market level.

“The airlines will bank it in the short term, but then they will use [the cash] to build market share or build a business,” he says. “This industry has a long history of irrational behavior.”

But would it be irrational to just take advantage of the situation and lease in some reliable, in-expensive mid-age aircraft?

“We take it as a given that fuel prices in the current range make it more attractive to retain, and acquire, 10- to 15-year-old airplanes instead of growing the fleet with new types,” he concedes.

However, he sees “two problems with that strategy.” Most of the new aircraft on order are intended for growth, not replacement. And there “is no way the used aircraft market could supply the over 1,000 new single aisle types now being delivered each year, particularly if the airlines are at the same time retaining the older types they have.”

Secondly, before a significant part of the airline industry gives up on orders, it would have to be convinced that fuel prices will stay low for ten years or so. “The fear of being on the wrong side of the fuel price trends, when significantly better products are available, is a risk most airlines would probably wish to avoid,” he says.

UBS, by contrast, warns there could be a negative effect for them. The Swiss bank has calculated that at current fuel prices 10-15 year old used narrow-bodies are 10-15% more cost effective than new current generation aircraft and 5-10% cheaper to own and operate than next generation aircraft such as the A320neo or 737 MAX.

“However, we think the main impact of $2.00 jet is that the probability of very high $4.00+ jet fuel that the airlines have had to guard against and plan for at $3.00 is now much lower. At $4.00, the used 10-15 year old aircraft would no longer be economical compared to new models, UBS argues.

Therefore UBS sees “the potential for airlines to extend the lives of older aircraft and increase their utilization benefitting the engine manufacturers, aerospace aftermarket and lessors with significant near-term lease expirations.”

The analysts warn that airlines could “begin to look to defer current generation aircraft on order if fuel remains at these lower levels for 6-12 months.”

UBS believes that Boeing is more at risk than Airbus because “it has a much larger gap to try to bridge to its next generation models.”