Airbus Reports Strong Orders and Deliveries in Difficult Month for Boeing
by J. Kasper Oestergaard, European Correspondent, Forecast International.
Boeing and Airbus delivered 57 and 81 commercial jets in October 2018, respectively, compared to 56 and 63 deliveries during the same month last year. Airbus’ performance in October, in what is traditionally an average month for deliveries, was impressive. Boeing has been dogged by late deliveries of engines, fuselages, and other parts and components for its flagship 737 narrowbody jet since July of this year. Despite a strong comeback in recent months, in early November Boeing warned of lower-than-expected October deliveries. The company expects shipments to rebound in November and December and reaffirmed its full-year delivery target. In 2017, Boeing delivered 763 jets (748 in 2016), in line with company expectations, while Airbus surpassed its delivery target of 700 jets by handing over 718 aircraft during 2017 (688 in 2016).
In October 2018, Boeing delivered 43 737s (of which 22 were 737 MAXs), well below the current monthly rate of 52 jets. The company also delivered one 767, one 777, and 12 787s. Boeing raised its 737 production rate to 47 per month in Q3 2017 from 42 previously, and recently increased it further to 52. Boeing plans yet a further increase to 57 737s per month in 2019. When asked about the potential for a 2020 production hike, Boeing’s CEO Dennis Muilenburg stated in September 2018 that the market can support a production rate higher than 57 per month. Boeing delivered 625 aircraft in the first 10 months of the year and is 15 jets ahead of last year’s delivery figures (was 14 ahead in September). A resolution to Boeing’s ongoing engine and fuselage supply chain issues is of critical importance while the company continues its transition to the 737 MAX while also ramping up the production rate. The 737 MAX is powered by LEAP-1B engines built by CFM International, a joint venture between France’s Safran and General Electric. Boeing 737 fuselages are supplied by Wichita, Kansas-based Spirit AeroSystems, which makes about 70 percent of the structure.
In October 2018, Airbus delivered two A220s, an impressive 67 A320s (19 ceo / 48 neo), three A330s, and nine A350s. In total, Airbus has delivered 584 aircraft this year to date and is 67 jets ahead of last year’s delivery figures (was 49 ahead in September). Airbus has done an impressive job of catching up after the company was trailing its 2017 deliveries by three jets in June and as many as 19 jets in May. Airbus’ long-lasting struggle with late deliveries of engines from Pratt & Whitney and CFM International for the A320neo family of aircraft appears to have ceased. A total of 181 A320neo family aircraft were delivered in 2017, vs. Airbus’ forecast of 200 – up from 68 in 2016. By mid-2019, Airbus expects to be delivering 60 A320 jets per month. The company has internally been debating rates beyond 60. Airbus delivered 78 A350s in 2017 and has increased the monthly production rate to 10 this year. Airbus is considering a further increase up to 13 A350s per month in 2019. The ramp-up of A350 XWB deliveries combined with a higher A320 production rate means that the company is narrowing Boeing’s deliveries lead and could surpass its top rival by 2019 or 2020.
With 11 net new orders in October, Boeing had a very slow month in the orders race. Boeing logged 18 gross orders (minus seven cancellations => net of 11). The company booked five small orders for a total of 10 737 MAX narrowbodies as well as two orders for the 787-9 Dreamliner that included six aircraft for Indian domestic carrier Vistara and one for Boeing’s leasing and lending arm, Boeing Capital Corporation. Additionally, an undisclosed customer placed a rare order for a single 777-200LR. To date, Boeing has only manufactured 59 aircraft of this variant, with the most recent having been delivered in December 2014. Delta Air Lines is the only U.S. 777-200LR operator, with a fleet of 10 aircraft. The 777-200LR held the world record for the longest scheduled nonstop passenger flight until October 11 of this year, when it lost the crown to a Singapore Airlines A350-900ULR.
After a terrible order haul in the first nine months of 2018, Airbus logged as many as 85 gross orders in October (one cancellation => net of 84). The highlight was VietJet’s order for 50 A321neos, finalizing a Memorandum of Understanding (MoU) signed at the Farnborough International Airshow in July. This order brings the overall number of A320 family jets ordered by the Vietnamese carrier to date to 171. In addition, Lufthansa placed an order for 17 A320neos. The last two orders were for 10 A330-900s for an undisclosed customer and eight A330-800s for Kuwait Airways. Despite being well behind Boeing in this year’s orders race, Airbus has retained an orders lead over its rival every year since 2012. In 2017, just as Boeing looked set to win the orders race, Airbus finished the year on a high note and reported a full-year intake of 1,109 net new orders, ahead of Boeing’s 912. However, assuming 50-100 net new orders for Boeing in November and December in total, Airbus will need to firm up orders for as many as 350-400 aircraft during the remaining two months of the year to win the orders race.
Airbus’ order backlog as of October 31, 2018, stands at 7,386 jets (of which 6,298, or 85%, are A220 and A320ceo/neo family narrowbodies), ahead of Boeing’s backlog of 5,881 aircraft (of which 4,671, or 79%, are 737 NG/MAX narrowbody jets). In August 2018, Boeing set a new all-time backlog high with 5,964 aircraft. Airbus’ backlog record was set in July (7,464 unfilled orders), thanks to the addition of the A220, formerly known as the Bombardier CSeries. The number of Airbus aircraft to be built and delivered represents a 10-year backlog at the 2017 production level. In comparison, Boeing’s backlog would “only” last 7.7 years. Airbus booked 1,109 net new orders in 2017, resulting in a book-to-bill ratio of 1.54. Boeing booked 912 net new orders in 2017, for a book-to-bill ratio of 1.20. In 2018 to date, Boeing boasts a book-to-bill ratio of 1.03 (1.11 in September), with Airbus at 0.57 (0.51 in September).
Forecast International’s Platinum Forecast System® is a breakthrough in forecasting technology. Among many other features, Platinum provides 15-year production forecasts. The author used the Platinum Forecast System® to retrieve the latest delivery forecasts. For 2018, Forecast International’s analysts expect Boeing and Airbus to deliver 801 and 776 large commercial jets, respectively. These are the latest “live” forecast figures (adjusted frequently by FI analysts as new information comes in). These figures exclude militarized variants of commercial platforms such as Boeing’s P-8 Poseidon, KC-46 Tanker and C-40 Clipper and Airbus’ A330 MRTT tanker.
In late January 2018, Boeing reported that it expects to deliver 810-815 commercial aircraft during 2018 (including militarized variants of commercial jets). The company will have to deliver 185-190 aircraft during the remaining two months of the year to meet its target. On February 15, 2018, Airbus announced that it expects to deliver around 800 commercial jets this year (including militarized variants of commercial jets), but at the same time emphasized that it depends on engine manufacturers meeting commitments. Airbus has to deliver another 216 jets this year to meet its target.
Note: Boeing 777-300ER category includes one 777-200LR order placed in October 2018.
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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.