by J. Kasper Oestergaard, European Correspondent.
Boeing and Airbus delivered 72 and 62 commercial jets in September 2016, compared to 77 and 49 during the same month last year, respectively. As of September 30, 2016, Boeing is trailing last year’s delivery figures with 563 (580 in 2015) commercial jets delivered, which is in line with company expectations. Airbus, on the other hand, has delivered 462 jets to date and is 16 deliveries ahead of last year.
In 2015, Boeing delivered 762 aircraft, ahead of Airbus’ 635, and both companies beat their 2015 delivery targets of 750-755 and ~630 aircraft, respectively. In 2014 and 2013, Boeing delivered a total of 723 and 648 jets, respectively, compared to Airbus’ 629 and 626. In late July 2016, Airbus reaffirmed its target of delivering at least 650 commercial jets in 2016, an increase of 15, or 2.4 percent, from 635 last year. Boeing, in contrast, has announced that deliveries could drop by 22, or 2.9 percent, to 740 from last year’s record of 762 deliveries.
In September 2016, Boeing delivered 46 737s, two 747-8s, two 767s, 10 777s, and 12 787s. Boeing currently plans to raise its 737 production rate from 42 per month today to 47 and 52 in 2017 and 2018, respectively. In early 2016, Boeing’s CEO, Dennis Muilenburg, announced that demand supports a further increase to 57 737s per month in 2019. Airbus is slowly ramping up deliveries of its A350 XWB and this, combined with a higher A320 production rate of 46 per month (commenced Q2 2016), means that the company is narrowing the gap in the deliveries race. In September 2016, Airbus delivered 53 A320s, three A330s, five A350s, and one A380.
With five A350-900 deliveries in September, Airbus still has to deliver 24 of the new long-haul jets to meet its target of 50 for the year, which now seems extremely difficult. The company expects to deliver more than 100 A350s in 2018, when the production rate will hit 10 per month.
In the orders race, Boeing had an average month of September with 55 gross orders and 30 cancellations (net of 25). Of the 55 aircraft orders booked during the month, 25 were 737 MAX 8 jets for Donghai Airlines based in Shenzhen, China. Airbus had a decent order haul in September and landed 49 gross orders; however, the company also incurred 107 cancellations (=> -58 net), the vast majority of which were A320ceo narrowbodies – see full list of orders in data table below. In 2015, Airbus booked a total of 1,036 net orders, while Boeing finished the year with 768 net new orders, or 268 fewer than Airbus. In both 2014 and 2013, Airbus won the orders race with 1,456 and 1,503 net new orders, respectively, ahead of Boeing with 1,432 and 1,355.
Airbus’ order backlog as of September 30, 2016, stands at 6,749 jets (of which 5,520, or 82%, are A320 family narrowbodies), ahead of Boeing’s 5,612 (of which 4,350, or 78%, are 737 narrowbody jets). The number of Airbus aircraft to be built and delivered represents a >10-year backlog (10.6 years of production). In comparison, Boeing’s backlog would “only” last 7.4 years at the 2015 production level.
An important question for the industry is whether the massive backlogs peaked in 2015 or will continue to grow throughout 2016. Airbus is 435 net orders down so far this year compared to January-September 2015, while Boeing is down 67. Both companies are likely to experience their lowest order haul since 2009. Recently, Boeing was reported to target only 535 orders for 2016 in an internal company forecast – well below its original forecast of 740-745 jets. Furthermore, Boeing has opted to leave list prices unchanged this year. The last time this happened was in 2001 and 2009. The prices set in July 2015 therefore continue to serve as the basis for talks with customers.
It is getting increasingly likely that backlogs at both companies will decline in 2016, owing to slower GDP growth and low oil prices. According to both Airbus and Boeing, the demand for passenger aircraft is tied to growth in worldwide revenue passenger miles (RPMs), which again is highly correlated with global GDP growth. The decline in orders should not be a major source of concern for jet makers, however. Backlogs remain near all-time highs and will provide stability and growth for years to come. The main concern for both companies continues to be cost and managing extensive global supply chains.
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