Despite A Lead In The Order Run, Airbus Needs To Re-strategize

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May 11, 2015

The plane maker from Europe, Airbus (EADSY, Financial) was able to grab 229 orders for aircrafts between January and April and 209 including cancellations. This was above the figures quoted by Boeing Company (BA, Financial), which made a mark through its delivery figures where Airbus lagged behind. Airbus received orders through the big Latin American win.

Airbus flying high

The big turnaround came as Airbus received confirmed orders from Columbia’s Avianca (AVH, Financial) for 100 Airbus jets in a deal worth $10 billion which includes 98 A320 Neo and 2 A319 Neo. As against Airbus, Boeing was able to receive only 153 total orders this year up to May 5, and 128 post probable cancellations. The key aircraft of Airbus, A380 superjumbo, which was launched in 2007, reported its 159th delivery recently. The A380 aircrafts took to a new high after its delivery to Etihad Airways last month, which took the record above 50%, compared with the total of the twin-deck planes sold so far. This happened coincidentally on the company’s tenth anniversary since its first flight. A380 is now under revamp probability to increase sales although the company looks quite confident on completing the delivery targets even without it happening. So far, the company had delivered one A350 this year and aims to deliver 15 in total by year end.

Deliveries don’t match

The year had begun with Boeing taking a lead in both orders and delivery. However, the confirmed order from the Latin American airline changed things around and Airbus took a lead in terms of order count. Boeing though was able to maintain its deliveries, which Airbus couldn’t match up. In April, Boeing delivered 66 new commercial planes as compared to Airbus, which delivered 62. For Boeing, 11 were 787s, 43 were 737s and nine were 777s. On the other hand, Airbus made deliveries of 50 A320s, nine A330s and three A380s in the month. Comparing the two, while Boeing delivered total of 250 new commercial jets, airbus completed 196 through April.

As a result, a backlog has been created for Airbus of 6339 planes by the end of April, which is higher than Boeing’s backlog of 5667 planes. Planes in backlog of Airbus are 5144 of single aisle A319, A320 and A321 aircrafts, 319 of A330 planes, 778 A350s and 158 of super-jumbo A380s. Boeing’s backlog on the other hand included 835 787s, 270 of the 777-300ER and 777 Freighter, and 4201 of the single aisle 737. The 747 noted a backlog of 33 and 42 planes in the backlog of 767.

The current state

The gulf airline Qatar Airways have however given some correction points to Airbus. Although they put Airbus above Boeing any time if the twin-engine A350-900 is compared to Boeing’s 787, airbus as per Qatar Airways seem to go a long way in coming to terms with changing market scenario. Very soon, the emerging market is going to adopt 400-sseat planes, which haven’t been planned by Airbus as yet. Currently it has the largest model as A350 with seating capacity of 369 people and the A380, which can seat 544 people. Even the revamp that Airbus talked about must ensure at least 10% to 15% of fuel savings, to make it relevant for Qatar Airways. Qatar Airways currently have 2 A350 in operation and it also operates Boeing’s 787 with an addition to be made soon of the larger 777X. Though Qatar has always praised Airbus for taking the feedback positively and working on it, the company is still unsure whether Airbus can take A350-1000 to a level that can compete with Boeing 777-9X which looks promising for a lot of airlines.