Both Manufacturers Report Strong Deliveries, with Boeing Well Ahead in Orders Race
by J. Kasper Oestergaard, European Correspondent, Forecast International.
Boeing and Airbus delivered 79 and 89 commercial jets in November 2018, respectively, compared to 70 and 74 deliveries during thesame month last year. Boeing has been dogged by late deliveries of engines,fuselages and other parts and components for its flagship 737 narrowbody jet sinceJuly of this year. After a weak month of October with only 57 deliveries,shipments rebounded in November. In 2017, Boeing delivered 763 jets (748 in2016), in line with company expectations, while Airbus surpassed its delivery targetof 700 jets by handing over 718 aircraft during 2017 (688 in 2016).
In November 2018, Boeing delivered 61 737s (of which 38 were 737 MAXs), well above the current monthly rate of 52 jets. The company also delivered one 747-8, two 767s, five 777s, and 10 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 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 has delivered 704 aircraft in the first 11 months of the year and is 24 jets ahead of last year’s delivery figures (was 15 ahead in October). 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.
In November 2018, Airbus delivered two A220s, an impressive 71 A320s (21 ceo / 50 neo), three A330s, 11 A350s, and two A380s. In total, Airbus has delivered 673 aircraft this year to date and is 82 jets ahead of last year’s delivery figures (was 75 ahead in October). Airbus has performed an impressive comeback after the company was trailing its 2017 deliveries by 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 48 net new orders in November, Boeing had a mediocre month in the orders race. Boeing logged 51 gross orders (minus three cancellations => net of 48). The company booked three orders for a total of 44 737 MAX narrowbodies, including 40 737 MAX 8s for South Korean low-cost carrier Jeju Air. Other November bookings included Novus Aviation Capital’s order for three 777-300ERs, Turkish Airlines’ order for three 777Fs, and the Japan Air Self-Defense Force’s order for one KC-767J tanker. The JASDF already operates four KC-767J tankers as well as four Boeing E-767 Airborne Warning and Control System (AWACS) aircraft. This year to date, Boeing has booked 690 net new orders (792 gross orders).
With 43 gross orders, Airbus boasted below average bookings in November (three cancellations => net of 40). Three customers, EasyJet (17), Vistara (13) and SaudiGulf (10), placed orders for a total of 40 A320neos. Furthermore, the French Air Force firmed up three additional A330 MRTT tankers via Airbus Defence and Space. The firm order for these additional aircraft stems from a multiyear contract for 12 A330 MRTTs signed in 2014. In French service, the A330 MRTT is known as Phénix. This year to date, Airbus has booked 380 net new orders (439 gross orders). 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 net new orders for Boeing in December, Airbus will need to firm up orders for more than 360 aircraft during the last month of the year to win the orders race. On December 7, Airbus reported that Avolon had firmed up an order for 100 A320neo family aircraft, which means the company still has to book more than 260 net new orders.
Airbus’ order backlog, as of November 30, 2018, stands at 7,337 jets (of which 6,262, or 85%, are A220 and A320ceo/neo family narrowbodies), ahead of Boeing’s backlog of 5,850 aircraft (of which 4,671, or 80%, are 737 NG/MAX narrowbody jets). In August 2018, Boeing set an all-time backlog high with 5,964 aircraft. Airbus’ backlog record was set in July 2018 (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 0.98 (1.03 in October), with Airbus at 0.56 (0.57 in October).
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 106-111 aircraft in December 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 127 jets this year to meet its target. Barring an end-of-the-year surge in deliveries, both manufacturers will fall short of their 2018 targets.
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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.