Boeing Outshines Airbus at the Paris Air Show

The Paris Air Show saw the American aerospace giant Boeing (NYSE:BA) emerge as the winner over its European archrival Airbus (EADSY). Boeing ended the show on a high note bagging 571 orders and commitments valued at $74.8 billion at list price. Airbus, on the other hand, claimed orders for 346 airplanes worth $42.2 billion.

Sales of both Boeing and Airbus were mainly met by impeccable demand of Asian and Iranian airlines. The single-aisle jets dominated the annual showcase in Le Bourget.

As far as Boeing is concerned, the biggest version of its 737 workhorse, MAX 10, stole the show. The company further said that it would start boosting production of its 737 models to 47 a month (from 42) by the end of 2017 and would reach 57 a month by 2020 so as to meet the demand.

By contrast, Airbus stands ahead of Boeing when it comes to total backlog. Airbus emphasizes speeding up its production process in the second half of the year as it looks to deliver 30 more aircraft to its customers than in 2016.

How Boeing fared at the show

Boeing stacked up a huge number of orders and commitments for the 737 MAX 10. The company won 147 fresh and incremental orders for the 737 MAX 10 and a further 214 orders were converted to this variant from other MAX models.

The Indian-based Spice Jet airline made a deal with Boeing by booking 40 737 MAX 10s. This was followed by other airline operators who also announced their orders and commitments namely the Chinese operator OKAY Airways Co. Ltd., Indonesia’s Lion Mentari Airlines PT, BOC Aviation Ltd. and Aviation Lease and Finance Co. (ALAFCO).

The Paris Air Show was predominantly about the narrow-body jets. Yet, there was something for long-range double-aisle jets, too. Boeing bagged 50 firm orders of 787 Dreamliner and six of the present model 777 jets, but the narrow-body single aisle jets constituted more than 90% of the sales at the Paris Air Show for both Boeing and Airbus.

Orders Airbus won

Speaking of commercial aircraft deals, GE Capital Aviation Services and Air Lease Corp.announced orders for 100 A320neo (valued $10.8 billion at list price) and 12 additional A321neo aircraft (worth $1.5 billion at list price).

In addition, Viva Air signed a MoU (Memorandum of Understanding) with Airbus for 35 A320neo and 15 A320ceo aeroplanes which would be valued at about $5 billion at catalog price. While Iran Airtour signed MoU with the company to buy 45 A320neo, Zagros Airlines signed MoU for 20 A320neo and A330neo.

Other airline operators who announced their orders and commitments for Airbus’ narrow-body single aisle aircrafts include CDB Aviation Lease Finance, Ethiopian Airlines and Portugal’s Hi Fly.

Narrow-body rules

Boeing comfortably outsold archrival Airbus at the Paris Air Show. Boeing expanded its 737 portfolio by unveiling MAX 10, and it certainly turned out to be a success story at the Paris Air Show. Max 10 is slated to enter service in 2020 and has bagged a huge number of orders and thus, the company would look to speed up production.

Surprisingly, the Chicago-headquartered company couldn’t get orders for the 777X. This Paris Air Show marked Boeing’s first triumph over Airbus since 2012. Airbus, on the other hand, takes a clear lead in the Asian economy bagging orders from Iran-based airlines.

What’s interesting to note is that the demand for double-decker jumbo jets, which were once considered as the future of air travel, has evaporated with neither Airbus nor Boeing mentioning any order for the A380 or the 747.

The narrow-body jets dominated the show with the long range twin aisle accounting for less than 10% of the total sales as airlines are looking for cheaper and economical aircraft. The combined new business deals struck by both the airplane manufacturers amounted to more than $114 billion at the Paris Air Show, though customers would be paying much less, thanks to the deep discounts.

Disclosure: I do not hold any position in the stocks mentioned in this article.

About the author: