Airbus and Boeing Battle for 2025 Delivery Dominance

Airbus and Boeing compete vigorously for every order. And the most active front of that battle is in the single-aisle market, where the NEO and MAX face off. These two aircraft deliver nearly identical economics (depending on the operator) and, for practical purposes, there's very little daylight between them. How do YTD delivery rates look? We are focusing on the A320neo family (excluding the A319) and the 737 MAX for this comparison. The following table shows YTD deliveries through this weekend. [caption id="attachment_92110" align="aligncenter" width="354"] AirInsight[/caption] Remember, Airbus has four FALS to Boeing's one, and Boeing is restricted to a rate of 38/month. Where Boeing exceeds 38, it delivered from inventory. Considering Airbus' four FALS, shouldn't it have a delivery rate at least double that of Boeing? YTD, Airbus is only about 10% ahead. The A321 is the most popular Airbus model in the segment, and for Boeing, it is the MAX 8. The history of the MAX program is well-documented, and we want to focus on the 2025 numbers. This year, Boeing has new leadership, and this post will track changes in the MAX program. The MAX program for Boeing and Airbus' A32Xneo program is "bread and butter" for the OEMs. Delivery Days One of our favorite metrics is the number of days it takes for an airplane to transition from its first flight to delivery. The shorter the period, the better the program runs, as customers prefer their deliveries to be made as soon as possible. This period can only shrink if customers don't require multiple test flights to bring their airplane up to delivery standards. Ergo, a shorter period reflects well on the industrialization of a program. The following chart shows deliveries for 2025. The highlighted deliveries are out of sync with those below the highlighted area. The Airbus models are triangles, and the Boeing models are dots. For Boeing, these are deliveries from the inventory that have aged. In some cases, by several years. Mostly, they are Chinese aircraft, typically acquired by Indian airlines. More recently, Chinese airlines have resumed taking their deliveries. For Airbus, aircraft in the highlighted area are unusual. [caption id="attachment_92111" align="aligncenter" width="640"] AirInsight[/caption] Upon examining the details of these deliveries, we observe the following. We highlighted the areas of concern. [caption id="attachment_92113" align="aligncenter" width="738"] AirInsight[/caption] The MAX 8 story revolves around the Chinese delays in taking their deliveries and India's exploitation of this opportunity. The MAX 8-200 and MAX 9 deliveries in July appear to be related to supply chain issues. We will see if this improves as the month goes on. The Airbus story revolves around its new XLR. A new model, even a variant, comes with its challenges. Add to this the well-known supply chain stress that Airbus faces. What is impressive is the efficiency Airbus has managed to drive in the A321NX program. It is now more efficient than the older A320neo program. Considering the A321 is the most delivered model, the low delivery days are excellent results. Improvements at Boeing A key agenda item to monitor is Boeing's return to MAX efficiency, pardon the pun. For Boeing, fixing the MAX situation is fundamental to optimizing resources. This is particularly important for the company's labor pool. So how are they doing? The following chart examines average delivery days, excluding any outliers that exceed 100 days. This"cealns" up the data for both OEMs. [caption id="attachment_92115" align="aligncenter" width="640"] AirInsight[/caption] The curves indicate that, for the most part, Boeing is approaching Airbus' average delivery days. At the ends of the curves, Airbus is at 22.6, while Boeing is at 38.2. The chart shows that Boeing managed to match Airbus in April. The supply chain has likely driven the deviation since then. Indeed, when we examine the curves in raw numbers, the Airbus YTD average is 24.9, while Boeing's is 30.9. Airbus has four FALs and delivers approximately 20% faster. For Airbus, the key issue is that most deliveries are for larger models (A321), which means, on average, higher revenue per delivery. These are significant advantages. Over time, they provide Airbus with a range of financial benefits and flexibility. But, to Boeing's credit, that one FAL has impressive potential. If the supply chain steadies and the FAA eases its rate limit from 38/month, the Renton FAL could speed up. If the FAA certifies the MAX 10 by year's end, then Boeing's delivery rates could rise sharply. Not only in volume, but in revenue as the MAX 10 competes with the A321. In other words, Boeing also benefits from higher revenue per delivery. Summary Although impressive, Airbus's industrialization is hindered by its supply chain. The XLR, a model with promise, also needs to get its rhythm. For Boeing, the numbers look far better this year than they have in a long time. Renton can vastly accelerate its rates once the FAA grants permission. Renton alone could probably reach 65/month at full throttle. The future Everett line will significantly add to this rate growth. Consequently, our view is that the new leadership at Boeing is having a positive impact. This is great news for Boeing, as well as good news for Airbus. A stronger duopoly is excellent news for the supply chain, which has been whipsawed by the duopoly post-pandemic.

No results