Air­bus loses to Boe­ing in an­nual jet or­der race

Euro­pean com­pany wins 747 net orders, down 33% from 2017

The Star Malaysia - StarBiz - - Foreign News -

LON­DON: Air­bus aban­doned a five-year win­ning streak in the race for jet­liner orders in 2018, slump­ing to its low­est share of the US$150bil jet mar­ket in six years but nar­row­ing a gap against US ri­val Boe­ing Co in air­plane de­liv­er­ies.

The Euro­pean com­pany said it had won 747 net orders, down 33% from 2017 de­spite a hefty con­tri­bu­tion from the Cana­dian A220 jet which it took over in July.

Boe­ing won the or­der race for the first time since 2012 with 893 orders.

Air­bus de­liv­ered 800 jets, up 11%, in­clud­ing 20 of the small A220 model, leav­ing Boe­ing as the world’s largest plane­maker by man­u­fac­tur­ing vol­ume for a sev­enth straight year.

Although Boe­ing missed its de­liv­ery tar­get and Air­bus had pre­vi­ously low­ered its goal due to strains on the in­dus­try’s global sup­ply chain, strong de­mand for pas­sen­ger jets ex­panded to­tal de­liv­er­ies by 8%, the fastest pace in six years.

Still, in­vestors are watch­ing for signs that a longer-than-usual aero­space cy­cle is fray­ing amid con­cerns over key mar­kets like China, even though some slow­down in orders had been ex­pected as man­u­fac­tur­ers di­gest record pro­duc­tion back­logs.

Plane­mak­ing chief Guil­laume Faury said Air­bus had achieved a “healthy or­der in­take,” with wait­ing lists for many new jets stretch­ing up to seven years.

In­sid­ers say its quest for new busi­ness has, how­ever, been over­shad­owed in the past year by in­dus­trial prob­lems, man­age­ment changes and morale prob­lems co­in­cid­ing with a cor­rup­tion probe.

It also faced a chal­leng­ing an­nual com­par­i­son after its for­mer sales chief re­tired with a swan song deal in 2017 for over 400 jets that an­a­lysts said had an­tic­i­pated fu­ture de­mand.

A resur­gent Boe­ing has mean­while been cash­ing in on greater avail­abil­ity and de­clin­ing costs for its flag­ship 787 Dream­liner, while strug­gling to re­gain lost ground in the lu­cra­tive seg­ment for large nar­row­body jets above 200 seats.

High­light­ing the pres­sure Air­bus has been fac­ing in the mar­ket for high-mar­gin wide­body jets like the 787, the Euro­pean com­pany was out­sold three to one by Boe­ing for a sec­ond year.

The or­der fig­ures un­der­score Air­bus’s de­ci­sion to take over the light­weight but loss-mak­ing Bom­bardier CSeries air­craft, gen­er­at­ing 135 orders worth US$12bil at list prices.

With­out that boost, Air­bus took just 41% of the core mar­ket in which it com­petes with Boe­ing, the low­est since 2009.

Air­bus’ Faury re­jected the com­par­i­son, telling re­porters the A220 was now “an in­te­gral part of the Air­bus prod­uct range”.

He said Air­bus had turned the cor­ner after sup­plier prob­lems sparked an end-year race to match the 800-unit de­liv­ery tar­get.

“It has not been a walk in the park in 2018 and we hope to have a more steady in­dus­trial ex­e­cu­tion in 2019,” he said.

Air­bus reached a tar­geted pro­duc­tion rate of 10 air­craft a month for its wide-body A350, com­pany of­fi­cials said.

Among a hand­ful of can­cel­la­tions, Air­bus of­fi­cially recog­nised in its books the loss in 2014 of an or­der for 10 A380 su­per­jum­bos from Hong Kong Air­lines, fol­low­ing ne­go­ti­a­tions.

The world’s largest air­liner is mostly de­pen­dent on Dubai’s Emi­rates Air­lines as Air­bus slows out­put in the hope of a fu­ture up­turn.

Some an­a­lysts say the record back­logs of Air­bus and Boe­ing still in­clude dozens of other jets un­likely to be de­liv­ered, but both com­pa­nies in­sist they only post valid con­tracts.

“I think we are in a healthy sit­u­a­tion to pre­pare the next cou­ple of years,” Faury said.

It has not been a walk in the park in 2018 and we hope to have a more steady in­dus­trial ex­e­cu­tion in 2019.

Guil­laume Faury

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