LONDON — Over the weekend, Boeing and Airbus have unveiled their 2017 statistics for aircraft deliveries and orders. Both manufacturers have had record years, featuring some major orders across the Paris and Dubai Air Shows respectively.
Boeing set an industry record by delivering 763 aircraft in 2017 alone, which is around two-plus aircraft per day.
In the same year, they grew their customer backlog to 912 aircraft to 5,864 aircraft and as a result of this, upped their 737 productions to 47 aircraft per month. 737 deliveries have been recorded at around 529 deliveries, with 74 accounting for the 737 MAX.
The 787 Dreamliner program delivered 136 planes in 2017, which has been Boeing’s highest production rate since the start of the program.
The Boeing 777 program only delivered 74 aircraft in the year, but this lowered demand could be down to the emergence of the 777X, which customers will now take more of a keener interest towards, as well as the 787-10 program too.
“The record-setting performance is a testament to our employees and supplier partners who continue to innovate new ways to design, build and deliver the most fuel-efficient aeroplanes to customers around the world,” said Boeing Commercial Airplanes President & CEO Kevin McAllister.
He also added, “The strong sales activity reflects continuing strong demand for the 737 MAX family, including the ultra-efficient MAX 10 variant that we launched last year, and the market’s increasing preference for Boeing’s family of twin-aisle jets. Our planned production increases over the coming years are designed to satisfy this robust demand.”
As for the 71 customers that ordered the 912 aircraft, these deals are valued at around $134.8 billion at list prices. Most of these high-value orders have stemmed from this year’s Paris Air Show and Dubai Air Show’s respectively.
The main four highlights that stemmed from the 900+ backlog featured a few big orders from the Paris Air Show and one from Dubai.
In Paris, there were orders for 75 737MAX 8 aircraft by lessor Avolon, 100 737 MAX 10s for United, 100 737 MAXs from AerCap, 125 of the same aircraft type from an undisclosed carrier, valued at well over $50-60 billion. In Dubai, FlyDubai made a record order for 225 737 MAXs, which alone were valued at $27 billion.
In Dubai, FlyDubai made a record order for 225 737MAX’s, which alone were valued at $27 billion.
Boeing’s Approach going into 2018
It has been a slow start to 2018, with Boeing and Turkish Airlines announcing a deal for three 777 Freighters, the only order recorded to the press by Boeing.
It may just be the slow first two quarters for Boeing this year, but with Farnborough 2018 coming up this Summer, it will hopefully be a successful airshow for the manufacturer to steal some major customers away from rivals Airbus, Bombardier, and Embraer, who will also look to do well on the commercial front.
In the 2016 Farnborough Air Show, Boeing sold 182 aircraft, which mainly consisted of aircraft in the 787 program and the 737 MAX programmes respectively.
However, with the success that they have had in 2017 at Dubai and Paris, they could be on track to sell a lot more aircraft than they did in 2016. They will want to capitalize on the successes of the 737 MAX and the 787 Programmes rather than the 747-8, that like with the A380, its production rate is declining at a rapid rate due to how little demand there is for super-jumbo/jumbo aircraft.
Boeing is a company that will want to beat the $134.7 billion of sales that were accumulated over 2017 and Farnborough is the biggest opportunity for them to do that. With only 45% of market share, they will want to gain their foothold back this year.
A few days after Boeing reported their results, Airbus announced theirs in a webcast. The manufacturer recorded 1,109 unit orders, valued at $137.7 billion, which is 197 units more and $3 billion more than their main competitor from 44 different customers, recording a book-to-bill ratio of 1:5. They have had a 4% increase in aircraft delivered to 718 aircraft to 85 customers in total, which was only a couple dozen less than what Boeing had delivered.
Fabrice Brégier, Airbus Chief Operating Officer, and President Commercial Aircraft commented, “A new Airbus delivery record coupled with our fifth best order intake wraps up a remarkable year for us. This outstanding achievement is a testimony to the dedication of all our teams, and makes the company fitter, stronger and ready for the opportunities ahead.”
The 2017 total deliveries comprised of 558 single-aisle A320 Family (of which 181 were A320neo – an increase of 166 percent over 2016); 67 A330s; 78 A350 XWBs (up by nearly 60 percent from 2016) and 15 A380s. Airbus’ total backlog is 7,265 aircraft which is valued at over $1 trillion. Airbus’ backlog is 1,400 aircraft greater than Boeing’s.
Their highlights had been evidently seen in the Paris and Dubai Air Shows. Like with Boeing, major orders were confirmed such as the 110 aircraft for Wizz Air. That accounted for over a fifth of the total PAS17 orders accrued for Airbus. They sold a staggering 510 aircraft in a single week, with 326 being brand new orders and the others being from previous Memorandum of Understandings etc.
Looking at the Dubai Air Show, their highlight of the airshow but also of the year was the $50 billion deal with Indigo Partners for 430 aircraft. These aircraft will be handed out to carriers like Wizz Air, Volaris, Frontier, and JETSmart.
It was an order that completely dismissed what Boeing thought was a large deal when FlyDubai ordered 225 of the 737MAX aircraft.
Airbus going into 2018
Looking into 2018, based on the plants that Airbus have in Mobile, Tianjin, Toulouse, and Hamburg, they believe that they can deliver 60 aircraft per month by the middle of next year, which shows developed growth across their plants.
For the year of 2018, they also believe that A350XWB production is on the way to delivering 10 of the aircraft type per month, which would highlight the extra demand for the wide-body aircraft.
Such extra demand and aims for more aircraft to be delivered will be met through the company developing the Airbus Beluga XL, which will have the extra capacity to meet such needs.
It has been built and will be undergoing tests throughout the year with aims for certification and service into mid-2019, coincidentally when they want to deliver more aircraft, which is timed well for the manufacturer.
Based on their huge success in 2017, they will look to continue to dominate the orders at the Farnborough Air Show. With the new executives in place, it will be interesting to see whether Eric Schultz, John Leahy’s replacement, can continue his legacy and acquire a load of orders over his career, like how Leahy did.
They will also want to look behind the corruption probes that have been taking place over the course of 2017, which supposedly resulted in Leahy retiring and Bregier not seeking election from the Board of Governors.
So they will look for a more politically clean 2018 without any such pressure from the WTO and other governmental bodies to investigate any insider corruption going on.
It will be a new year for them after they acquired the vast majority of the Bombardier CSeries program, which should bring in more revenues for the manufacturing giant as well as curtail the ongoing disputes on trade due to the huge tariffs on production in Canada. Now that some of the programs will be in Mobile, they should be able to keep the costs down and not pay excessive amounts of money to produce the aircraft.
This year could probably be the only year they have to potentially rekindle any final sales of the A380 as the production rate is forever declining. If they do not bag any sales, then the chances of profiting from the program become slimmer and have a far greater chance of being disbanded.
Farnborough is the last proper opportunity for the manufacturer to make the program thrive. Leahy did say that if Emirates, in particular, do not order any more of the aircraft type, then the A380’s future is doomed and that they will have to cancel production if that is the case.
— Max Kingsley-Jones (@MaxK_J) January 15, 2018
All-in-all, with a 55% market share in the aerospace market, Airbus have had a very comfortable 2017 and aim to continue that comfortability going into 2018.
To conclude, it has been a massive year for the aerospace industry. With $272.4 billion worth of aircraft being sold in a single year, it shows that aerospace is heavily demanded still and highlights the success of both manufacturers. With developments such as the 777X and the A350-1000 on the way and yet to thrive, it could be just as good a year in 2018 as 2017 has been.
But for now, Airbus does not have to sweat. With more backlogs and more orders secured this year than Boeing, they will be going into Farnborough very confident this year. Boeing will have to thrive this year in order to have a chance of catching up the backlog.