MIAMI — Boeing set numerous records for airplane deliveries and production in 2013 despite a challenging year.
It is no surprise that 2013 was a difficult year for Boeing. The company’s 787 Dreamliner started off 2013 with a rash of battery fires that wound up grounding the airplane for nearly a quarter of the year. The airplane, whose woes continued well past its return to service in late April, continually landed the Chicago-based aerospace firm in hot water headlines throughout the year. To finish 2013 out, the ugly, protracted battle with the IAM 751 machinists union in Seattle over 777X production graced the papers through much of the fourth quarter.
Yet the spate of bad news and bedeviling headlines masked an otherwise banner year for Boeing. A total of 648 airplanes were delivered through the course of 2013, a new record. Boeing blasted its previous record of 620, set in 1999 while the McDonnell Douglas plant in Long Beach was still active. By comparison, all but fourteen of the jets were made in the Puget Sound region plants.
All of the company’s most popular jets broke individual records, including the 737 (440) and 777 (98). Even the 787 Dreamliner hit 65, a feat only possible considering production continued unabated through the grounding.
The record setting output reflects a concentrated push over the past year to compete more effectively with arch-rival Airbus. Boeing has pressed mightily to wring the greatest possible output from its handful of Puget Sound plants to counter Airbus’ numerous facilities around the world. Production rates for Boeing are expected to max out late in the decade as the current plants are pushed to what is believed to be the absolute limit of capacity. Presently the company produces 38 737s, 8.3 777s, and 10 787s per month.
Airbus has not yet released 2013 figures, but it has delivered 562 airplanes through November. Reuters Aerospace reported on Monday that the European airplane maker delivered 625 airplanes, a figure Airbus declined to confirm.
The company’s production backlog also continued to grow to a new high of 5,080 jets in 2013, a product of orders far outpacing deliveries. And oh was 2013 a good year for orders. The manufacturer booked a record 1,531 gross (1,355 net) firm orders.
The bulk came from Boeing’s backbone program, the 737. The Next Generation (NG) and MAX versions of the stalwart airplane pulled down 1,046 net orders, worth an estimated $56 billion. The 787, despite all of its problems locked in 182 orders for second place. The 777 placed third with 113, while the 747 and 767 programs trailed far off into the distance at twelve and two, respectively.
The total commitments, which are limited to firm orders (hence the 777 count not including Emirates’ Dubai spending spree), add up to over an estimated $103 billion at list prices. The actual dollar total is likely much lower, as, like with vehicles, no one pays list price in the aviation business. In either case, the total number of net orders is the second highest ever for Boeing, the previous record being set in 2007.
Whether Boeing will ultimately edge out Airbus for the year in total sales is yet unclear. But it will be a close match, with Airbus reporting 1,314 net firm orders through November.
What is clear is that regardless of Airbus’ performance, investors have loved Boeing’s. Despite the 787 nightmare investors pushed shares of the company up an astounding 81 percent through 2013. It is currently trading at $141 a share.
The backlog, combined with the record orders and deliveries, also featured heavily in the 777X production site debacle. In order to secure production of the airplane in the Seattle area, Members of the International Association of Machinists & Aerospace Workers were asked (arguably forced, depending on who you ask) by Boeing to give up hard-won benefit and pension plans in the name of competitive overhead costs down the road. Union members initially balked at the deal, pointing to Boeing’s record year as evidence such take-aways were not needed. Even after the second round of contract negotiations were ultimately approved by the IAM, many members, including those that voted yes, have a bitter taste in their mouths over the issue.