This month, airline manufacturer Boeing (BA, Financial) sold sixty-one 737 commercial airliners to a single buyer for a massive deal worth $6.6 billion at list prices. While the company revealed details of the order – 51 aircrafts were ordered in 2015, while 10 were ordered last year – few other details of the buyer were publicised by the American multinational corporation. Speculation about who was behind 77% of Boeing’s 2015 net sales of single-aisle 737 commercial plane was laid to rest last week, when the company revealed that it had sold to Panama’s Copa Airlines (CPA, Financial). With the deal, Copa earned the distinction of being the first airline to operate Boeing’s 737 MAX 9 aircraft on deep South American routes. Let’s take a peek into the order book of both the rivals in the aircraft industry to decipher how the competitive ground is gradually heating up after the first quarter.
Sales and competition on the rise
71 orders for 737 commercial airlines, 35 orders for 787 Dreamliners, 7 orders for Boeing 777 aircrafts, three orders for 747 jumbo jets and one single order for 767 wide body aircraft, make up the 117 gross orders for Boeing already this year through mid-April. Net orders till mid-April 2015 stand at 111 commercial aircrafts for Boeing after accounting for the 6 cancellations till date.
European competitor, Airbus Group NV (EADSY, Financial) is also not too far behind. 87 orders for single-aisle A320 aircrafts and A321 aircrafts and 34 orders for A330 aircrafts make up the gross total order count of 121 airplanes at the end of March 2015. But 21 cancellations till date bring Airbus’s net orders down to 101 orders, just 10 less than Boeing.
Airbus is not too far behind in its order count this year when compared with the same time last year. By the end of March 2014, the European airline manufacturer had rounded up a gross order tally of 158 and after accounting for 55 cancellations, its net orders were at 103. In fact, even this year the order count looks pretty interesting for the European aircraft manufacturer.
Boeing’s supremacy is at stake
There is still a long way to go for both aircraft giants this year. The first quarter is usually slow, with regards to sales and orders gathering steam. By this time in 2014 though, Boeing boasted 280 gross orders, with a net order tally of 235. So far in the first quarter of 2015, it does not look like the year Boeing will beat Airbus in the sales and airlines delivery race. This might not spell good news for the U.S. aircraft manufacturer which plays a dominant role in the aircraft industry.
Boeing’s common stock peaked in February 2015 to touch the highest of the year at $158.83. Share price performance this year has been better than 2014, though Friday trading saw Boeing share’s fall by 1.56% to $149.6, from the previous close of $151.97. Twelve of 18 analysts polled by Zacks Investment Research give the stock a ‘Strong Buy’ rating, and community sentiment is bullish, according to NASDAQ.
Final word
Strong healthy competition is the tell-tale sign of a robust well-managed business. Airbus and Boeing have been and shall be keeping each other on their toes. The upcoming quarter of the year will provide better idea on how the order books of the two aircraft manufacturers grow in the next three months and maybe then we will be able to assess better whether Boeing’s supremacy in order count and deliveries over Airbus is maintained or not.
