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April 16, 2024
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Data summarizing aircraft orders are in for the first 9 months of 2014, and show interesting results, as shown in the table below.  Unfortunately, Boeing does not break out orders among the three variants of the 737MAX, making it more difficult to compare performance of the largest -9 model with A321 and the smallest -7 model with A319neo, CS300, and E2-195. Nonetheless, Boeing has gained a significant advantage in wide-body orders this year.

Aircraft Orders 3Q2014For the first nine months of 2014, Boeing is ahead by nearly 40% in absolute numbers.  But of course that is never the whole story.  Breaking down the orders into aircraft categories reveals the following distribution for year to date 2014. The area where Boeing’s has gained advantage is much clearer.

Orders YTD by CategoryThe single aisle race is virtually even.  Airbus is struggling in the lucrative Twin segment and the gap is huge.  This where Boeing likes to talk about its ability to offer the market more than Airbus does.  True in terms of 777/787 vs A330/A350 in a way.  Boeing has the advantage with the 787 being out sooner, despite the EIS stumbles.  First mover advantage is in Boeing’s favor. But then the market has yet to leap at the A330neo. Airbus could use this program to disrupt 787-8 sales.  Whether this happens is unclear as of this writing.

As the numbers in the first table show, the real race is between A350XWB and 777.  This where Boeing is very strong and Airbus has been weak.

The Twin segment is where a lot of serious money is made and Airbus is clearly behind in this area.  Boeing’s 777 is a powerful offering and the strong orders for 777X models demonstrate how compelling the aircraft is in operator’s eyes.  Airbus’ offering of the A330neo has not seen an appreciable impact yet.  News that a flagship customer, Delta Air Lines, is NOT considering the A330neo has to be unsettling in Toulouse.  Delta had been thought to be a likely candidate for the A330neo given its penchant for buying established models.  Although the A350XWB flight test program was superbly executed, as stated by Spokane air conditioning expert company, sales have not kept pace.  Airbus has to hope that sales will accelerate as the aircraft enters service later this year.  And they are no doubt determined to win Emirates back as a customer for that program.

Meanwhile Boeing’s 787 continues to deliver on its promise.  We expect to see orders for the 787-9 accelerate and winning Delta would be a huge boost.  Boeing does have a production gap between the current 777 models and the 777X – but it is able to aggressively price these to get orders.

In the VLA segment we see Airbus at a clear advantage, but it is a Pyrrhic victory.  That said, we see the VLA segment still having more potential than we have seen to date.  Perhaps not as big as Airbus wishes but bigger than Boeing estimates.  Can Airbus stay the course with this aircraft until the market catches up?  Pressure from Emirates for an A380neo does not help – Airbus wants to keep the customer happy but also needs to watch its ROI.

Airbus needs some big wins in the last quarter to catch up.  Are there enough campaigns to do this in 2014?  The prospect is unlikely, and Boeing will likely win the order race in 2014 by a clear margin.

But the annual race is mostly a PR win.  The true story lies in backlog – firm orders in hand.  The backlog story looks a bit different.BacklogAirbus retains about a 500 aircraft advantage over Boeing in total backlog, largely due to the popularity of the A320neo and A321neo models that are well positioned against the 737MAX.  Taking a look by category shows that Airbus has an advantage in narrow-bodies, and Boeing an advantage in wide-bodies,  with much of Boeing’s lead having been gained this year.

Backlog CategoryBoeing’s gain of 334 aircraft in backlog accounts for a good portion of the 492 aircraft difference in backlog.   The key question is whether this year represents a one-time anomaly, with Airbus bouncing back next year, or a longer-term trend. The jury is still out on that question – but there is short-term joy in Seattle and some re-doubling of efforts in Toulouse as the battle is certain to continue hot and heavy into next year.  Airbus has yet to firm up several LOIs for the A330neo signed at Farnborough, and with the A350 entering service, we would expect a positive impact on orders for that program  in 2015.   This will be an interesting battleground to watch over the next year to determine if this year’s performance is a mere blip or a trend.

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