News Backgrounder
Airbus tops order book in 2015
But Boeing is the king of cash.
February 1st 2016
For the world’s big two commercial jet manufacturers, January is report card time and only one of them can top the class. In 2015, that honor went to Toulouse-based Airbus. But Boeing was by no means a loser. Read More »
Airbus won bragging rights in 2015 with the sale of 1,036 airplanes, exceeding its target for the 12 months. Boeing had net orders of 768 aircraft, but when the bean counters set to work the Seattle manufacturer came out ahead in terms of hard cash.
Most of Airbus’ sales for the year were for cheaper, narrow-body A320 family airplanes. But at Boeing, its numbers were weighted by higher sales of wide-bodies such as the B787 and B777 and came in at US$112.4 billion at current list prices, putting the manufacturer ahead of the value of Airbus’ sales.
But for both manufacturers, despite increasing concerns about global economic conditions, particularly the slowdown in China, the skies are gloriously sunny. Airbus delivered 635 jets to its airline customers and other buyers last year and has a backlog of 6,787 aircraft to deliver at list prices of $996.3 billion.
Boeing delivered 762 aircraft in 2015 and holds a backlog of 5,795 jets, worth more than $1 trillion. The order books are enough to keep their production lines humming at full speed for years.
“The Boeing team has worked hard to achieve strong performance,” said Boeing Commercial Airplanes president and chief executive, Ray Conner. “Our team did a fantastic job achieving higher deliveries and delivering our products to our customers as quickly and efficiently as possible. This will continue to be our focus.
“We had a solid year of orders in 2015, maintaining a strong, balanced backlog that will help ensure a steady stream of deliveries for years to come.”
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Airbus chief executive, Fabrice Bregier, was similarly upbeat and shrugged off market turmoil in China. He said Airbus is committed to a new facility in Tianjin as well as to its overall strategy in China.
“We should not mix up problems we see in the financial markets and the real economy,” he said during a media briefing in Paris. He forecast new U.S. visa policies would boost Chinese air travel and that Asian middle class demand would continue to grow.
Airbus is increasing production in 2016, especially of its A350 wide-body, to keep up with order demand and catch up with Boeing’s dominance in aircraft deliveries. Increased automation and “digitalization”, including 3D printing of some plane components, will be critical in achieving its goals, Bregier said. Airbus hopes to deliver more than 650 planes this year, but the proportion of single-aisle versus longer-haul jets would remain roughly the same.
Both manufacturers, who are increasing production rates as their order books grow, may face threats, predicted Teal Group’s Richard Aboulafia. The analyst said that from an investor standpoint, the factors that could have the biggest impact on the airline industry are beyond the control of their chief executives: fuel prices and interest rates.
“If oil prices remain low and the cost of borrowing rises, the industry could quickly find itself in trouble, Aboulafia said. “When fuel is costly and cash is cheap, it makes a lot of sense for airlines to look at replacing older, less efficient airplanes with newer, more efficient models. If the environment changed, airlines may be less likely to buy new planes.
“We’ve been living in this incredibly perfect environment for seven or eight years where cash is almost free and there’s every reason in the world to replace your older aircraft. One of those factors is changing and the other one could well change.”
Airbus’s chief operating officer customers, John Leahy, who also spoke in Paris, hinted Airbus may decide this year to launch a bigger version of the A350. with entry into service in 2020. The plane would be targeted at the 400-seat sector to compete with Boeing’s 406-seat B777-9X, also due to enter service in the same year.
“If we are going to do it we should do it this year. We don’t want to let Boeing have too much of a run with the 777-9X. They are bringing their airplane out in 2020 and we shouldn’t be that far behind them,” he said.
Leahy said Airbus is spending more engineering time on the possible next step in the development of the A350 rather than on changes to the A380. If there is to be an A380neo (new engine option) it would enter service in 2024 or 2025, about three years later than suggested as recently as last November, Leahy said.
