Airbus produced their numbers for 2016 today. They were better than expected – mainly because they hit a book to bill of one. Airbus reported 732 net orders and 688 deliveries generating a book to bill of 1.06. Airbus projects a ratio of under one for 2017.
Airbus had its usual year end flurry of orders – 60 A320neos for Flynas and 42 single aisles for the Chinese Bank of Communications.  But even so, orders were off a lot (350) from 2015.  What do the results look like in perspective?The next chart shows how the mix of orders and deliveries swung in 2016. Airbus saw better orders in the widebody segment and remarkable widebody deliveries in 2016. Deliveries were driven by A350s delivered at an impressive rate. While this was supposedly a one-off, encouraged by bonuses, we expect to see the A350 FAL team pushed hard again in 2017. Rumors are that a rate hike is on the cards and, given the layoffs, that team will have to work very hard in 2017.
Breaking down the O&D we see the following for single aisles. If there was any doubt, there should by now be none – neo has taken over. In 2016 there were -49 A320ceos net orders. The only ceo still seeing demand is the A321. Although the various A320 FALs are working well and generated 545 deliveries in 2016, ceo deliveries are going to fall steadily as the plants move to neo. We anticipate 2017 deliveries to rise above 545 as the Mobile plant gets to critical mass. There is almost certainly some rivalry between the FALs and Mobile has the most to prove.
To further illustrate the swing to neo from ceo, the next chart shows this to effect. Even with orders down, the neo program dominates. This is going to be a very good source of business for Airbus, as the product obviously resonates with customers.
Comparing the O&D for twin aisles we see the following.
The A350 has been a star seller because of 2013 orders – but has also seen wide order swings. In terms of deliveries the A350 had a stellar year. We expect more of this as the supply chain kinks are worked through and the A350-1000 moves through its development. Any bonuses earned by the A350 team were deserved – but Airbus is probably going to have to do it again in 2017 to get that kind of delivery performance. Though we expect the FAL team wants their August break back.
Meanwhile the A330 has been the twin aisle bedrock – providing a firm base for the company’s programs. The adding of capabilities ensured ongoing interest in the ceo. As we can see though, A330ceo deliveries are starting to slow. This is a combination of market demand slowing for twin aisles generally, but also market anticipation of the forthcoming neo. As we can see, A330neo interest has been steady after an initial flutter. We would not be surprised to see Airbus offer customers swaps as they have done with single aisles.
There isn’t much to add about A380. The decision by chief cheerleader Emirates to slow deliveries sent a chill. But that may be less an issue with the aircraft, because traffic for the ME3 growth has slowed. They live in a rough neighborhood and there are spillover effects. Moreover lower oil prices also mean greater capex caution is appropriate.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.
