Airbus and Boeing Report July 2019 Commercial Aircraft Orders and Deliveries

Boeing Conducts 500th 737 MAX Test Flight – Targets Early Q4 Return to Service

by J. Kasper Oestergaard, European Correspondent, Forecast International.

Boeing recently reported that it has conducted its 500th test flight featuring updated 737 MAX software. The company hopes to return the aircraft to service early in the fourth quarter. Photo: The Boeing Co.

Boeing and Airbus delivered 19 and 69 commercial jets in July 2019, compared to 39 and 77 deliveries, respectively, in the same month last year. With 258 deliveries this year to date, Boeing is 159 shipments behind last year’s total for the first seven months of the year. Airbus delivered a total of 458 jets from January to July, compared to 380 during the same period last year. Boeing’s deliveries have taken a severe hit since the March 10 crash of Ethiopian Airlines Flight 302, a 737 MAX, and the subsequent deliveries halt and grounding of the fleet. Boeing decided on March 14 to suspend all deliveries of 737 MAX jets. The crashes were with a high degree of certainty caused by the aircraft’s Maneuvering Characteristics Augmentation System (MCAS), which suddenly activated in response to erroneous angle of attack information. In 2018, Boeing delivered 806 jets (763 in 2017), with Airbus handing over 800 (718 in 2017).

In July, Boeing delivered two 737 NGs. Boeing is still producing 737 MAX jets at a reduced rate of 42 aircraft per month and thereby building up an inventory of aircraft ready to be shipped. During 2018, Boeing raised its 737 production rate to 52 and was planning a further increase to 57 per month from June this year. Producing the 737 MAX at a reduced rate will allow the company to prioritize additional resources to focus on returning the 737 MAX to flight. The Federal Aviation Administration (FAA) has established a Boeing 737 MAX Joint Authorities Technical Review (JATR) comprising a team of experts from the FAA, NASA, and international aviation authorities. The review sessions commenced on April 29 and the JATR’s work is ongoing. On May 16, Boeing announced that it had completed development of the updated software for the 737 MAX and that it had flown the aircraft with updated MCAS software for more than 360 hours on 207 flights. On May 23, the FAA held a full-day meeting with representatives from 33 global regulatory bodies to discuss the process for bringing the 737 MAX back into service. On June 26, Boeing announced that the FAA has identified an additional requirement that it has asked the company to address as it updates the software, and Boeing is now working to implement this. On August 5, Boeing CEO Dennis Muilenburg announced that the company has conducted almost 500 737 MAX test flights with updated software. According to the Associated Press, Boeing is currently working on new software for the 737 MAX that will use a second flight control computer to make the system more reliable. It remains unclear when the 737 MAX will return to service. Boeing’s best estimate is that the jet could be approved “early in the fourth quarter.” The largest operator of the grounded jet, Southwest Airlines, has canceled all 737 MAX flights through early January. To date, Boeing has delivered 387 737 MAXs, of which 57 were delivered in Q1 2019. A total of 256 737 MAX jets were delivered in 2018, up from 74 in 2017. In July, Boeing also delivered three 767s, two 777s, and 12 787s. Boeing recently raised the monthly Dreamliner production rate to 14 aircraft. Boeing has handed over 90 787s year-to-date. The company delivered 145 787s in 2018, up from 136 in 2017. In connection with Boeing’s second quarter 2019 earnings report, Muilenburg announced that Boeing plans to increase 777F production due to 777X delays, but provided no further details.

In July, Airbus delivered two A220s, 52 A320s (7 CEO / 45 NEO), seven A330s, seven A350s, and a single A380. A total of 386 A320neo family aircraft were delivered in 2018, up from 181 and 68 in 2017 and 2016, respectively. Later this year, Airbus expects to increase the A320 production rate to 60 aircraft per month. Furthermore, the company is targeting a raise to 63 jets per month from 2021. Airbus has delivered 60 A350s year-to-date and delivered 93 A350s in 2018, up from 78 in 2017, and recently increased the monthly production rate to 10. Airbus is considering a further increase to 13 A350s per month, but a date has yet to be announced. With the ramp-up of A350 XWB deliveries combined with a higher A320 production rate, Airbus has nearly eliminated Boeing’s deliveries lead in recent years. Following the tragic 737 MAX events, Airbus is almost certain to deliver more aircraft in 2019 than Boeing will.

Turning to the orders race, Boeing had a solid month in July, logging 31 gross orders, all 777 and 787 widebody jets (no cancellations => net of 31). Boeing’s July bookings included 20 787 Dreamliners for Korean Air: 10 787-9s and 10 787-10s. Korean Air committed to buying these aircraft at the Paris Air Show in June and has now firmed up the order. In addition, an undisclosed customer ordered a single 787-8. Qatar Airways firmed up five 777 freighters (Paris commitment), with China Airlines firming up three (Paris commitment of six 777Fs). Finally, an undisclosed customer placed an order for two 777-300ERs. Year-to-date, Boeing has accumulated 139 gross orders (227 cancellations => -88 net new orders). For the full year 2018, Boeing booked 893 net new orders (1,008 gross orders).

In the orders race, Airbus had a disappointing month and booked 33 gross orders but, at the same time, reported 42 cancellations, resulting in nine net cancellations. In July, Republic Airways canceled an order for 40 A220-300s. Airbus’ July orders were a mix of A320neo narrowbodies and A330 and A350 widebodies. The largest orders were 20 A350-900s for Air China and eight A330-900s for Virgin Atlantic. The Virgin Atlantic order was announced at the Paris Air Show. For 2019 to date, Airbus reports 246 gross orders (167 cancellations => net of 79). Of the cancellations, 31 were due to Emirates’ decision earlier this year to reduce its A380 order book. This subsequently forced Airbus to announce that it will cease A380 production in 2021. In 2018, Airbus landed a total of 747 net new orders (831 gross orders), thereby losing the 2018 orders race as Boeing had accumulated 893 net new orders. Airbus had retained an orders lead over its rival every year since 2012.

On July 31, 2019, Airbus had a backlog of 7,198 jets, of which 6,253, or 87 percent, are A220 and A320ceo/neo family narrowbodies, not far below the company’s all-time backlog record high of 7,577 jets set in December 2018. By the end of July 2019, Boeing’s backlog (total unfilled orders after ASC 606 adjustments) was 5,745 aircraft, of which 4,599, or 80 percent, are 737 NG/MAX narrowbody jets. Boeing’s all-time backlog high of 5,964 aircraft was set in August 2018. The number of Airbus aircraft to be built and delivered represents 9.0 years of shipments at the 2018 production level. In comparison, Boeing’s backlog would “only” last 7.1 years. This year to date, Boeing’s book-to-bill ratio, calculated as orders divided by deliveries, is negative. Airbus’ book-to-bill ratio is 0.17. In 2018, Boeing boasted a book-to-bill ratio of 1.11, with Airbus at 0.93. In 2017, Boeing booked 912 net new orders for a book-to-bill ratio of 1.20. That same year, Airbus booked 1,109 net new orders for a book-to-bill ratio of 1.54.

2019 Forecast

Forecast International’s Platinum Forecast System® is a breakthrough in forecasting technology. Among many other features, Platinum provides 15-year production forecasts. The author has used the Platinum Forecast System® to retrieve the latest delivery forecasts and, for 2019, Forecast International’s analysts expect Boeing and Airbus to deliver 724 and 875 large commercial jets, respectively. The 2019 forecast for Boeing was 904 prior to the second 737 MAX crash and the subsequent grounding of the fleet and temporary cut in the production rate. These are the latest “live” forecast figures (adjusted frequently by FI analysts as new information comes in).

Prior to the second 737 MAX crash, in connection with the release of its 2018 earnings report in late January, Boeing announced it was targeting between 895 and 905 commercial jet deliveries in 2019, a 12-13 percent increase from 2018. Boeing has yet to announce a revised figure and is likely awaiting the 737 MAX’s return to service before providing updated guidance. On February 14, Airbus announced that it aims for 880 to 890 commercial aircraft deliveries in 2019, equal to a 10-11 percent increase from 2018.

Note: Boeing 777-300ER category includes one 777-200LR order placed in October 2018.

Joakim Kasper Oestergaard is Forecast International’s AeroWeb and PowerWeb Webmaster and European Editor.  In 2008, he came up with the idea for what would eventually evolve into AeroWeb.  Mr. Oestergaard is an expert in aerospace & defense market intelligence, fuel efficiency in civil aviation, defense spending and defense programs.  He has an affiliation with Terma Aerostructures A/S in Denmark – a leading manufacturer of composite and metal aerostructures for the F-35 Lightning II.  Mr. Oestergaard has a Master’s Degree in Finance and International Business from the Aarhus School of Business – Aarhus University in Denmark.


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