Airbus or Boeing: Who Wins the Battle for the Skies in 2014?

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Jan 15, 2015

The American plane maker Boeing (BA, Financial) finished 2014 on a solid note by beating Airbus’ (EADSY, Financial) deliveries for the third consecutive year. Boeing dispatched a higher number of commercial aircraft during the year compared with its rival. But Airbus marched ahead of Boeing as far as the 2014 total net order count is concerned. The neck-and-neck battle between the two aircraft manufacturers is moving on to the next level as demand for new planes is increasing with rising air traffic.

Airbus and Boeing are boosting their production levels to increase deliveries and improve their cash flows. The companies are also battling to grab a greater share of airplane orders to solidify their production pipeline. Let’s take a look back at 2014 to see what numbers each scored on the delivery and order front.

The numbers at a glance

Though delivery of 629 jets was a record number for Airbus, it wasn’t enough to surpass Boeing’s magnificent delivery number of 723 jets. Airbus’ deliveries have been improving continually in the last 13 years, but Boeing tops the chart for 2014 to become the largest plane manufacturer for the third straight year.

Airbus, however, must be feeling content regarding the order count for the year that passed by. The European plane maker recorded orders for 1,456 jets, net of cancellations. Boeing, on the other hand, bagged net orders for 1,432 planes. These numbers are more than analyst expectations. It was difficult to guess which plane maker would end the year with higher orders. In fact, Boeing’s chances of closing the year as a winner were higher, but December turned out to be a great month for Airbus, making the jet maker advance beyond its rival. As a matter of fact, December was the fourth-best month ever for Airbus in terms of orders.

Airbus’ order books show a count of 6,386 planes, which translates to a business worth $919.3 billion at list price. Boeing also had a strong order book with a backlog of 5,789 aircraft. Airbus’ COO John Leahy observed that about half the orders for new planes had been placed by lessors, which highlights their increasing role in the aerospace industry.

What to expect this year?

2014 was an eventful year for both Boeing and Airbus with rich orders, unexpected cancellations, service entry of the A350 XWB, 150 777s order confirmation by Emirates to Boeing and more. The present year is expected to be a transitional year that could move at a slower pace. Airlines were seen to place bulk and small orders in 2014 that led to the formation of record backlogs for both Airbus and Boeing, but this trend could be seen settling in 2015. Nick Cunningham of Agency Partners said that “big orders can swing it, but it is harder to see where these will come from.”

However, Airbus’ commercial aircraft division CEO Fabrice Brégier looks decently optimistic for the current year and believes that the company will see a book-to-bill ratio of more than one. This implies that he expects net orders to surpass the delivery count on the back of strong demand. He says that the delivery count should see a mild improvement this year. The company has already delivered the first A350 XWB to launch customer Qatar Airways in December and is preparing to deliver around 15 of these jets in 2015.

Going forward

Piling backlog is good news for Airbus and Boeing, but it creates a difficult environment for several airlines and lessors who want their planes delivered quicker. Both Boeing and Airbus are working to optimize their production capacity to boost deliveries over the coming years and meet the increasing needs of the airlines. How 2015 will unfold as far as orders are concerned remains to be seen. Is Boeing poised to beat Airbus in terms of deliveries yet again? It will be interesting to see how the year unfolds for the duo.