Posted on 01/17/2006 12:11:57 PM PST by Turbopilot
European group won 52 per cent of the world market in terms of aircraft in 2005.
Airbus surprised the aircraft industry by claiming it had outsold Boeing last year by winning the most new orders for commercial aircraft despite a record sales drive by its US rival.
The announcement took the aerospace industry by surprise, as Airbus disclosed that it had secured 1,111 gross new orders in 2005 compared with the 1,029 claimed earlier this month by Boeing and said it had booked 38 per cent of the orders in December alone after trailing Boeing for the rest of the year.
Airbus, which is owned 80 per cent by EADS, the Franco-German aerospace and defence group, and 20 per cent by BAE Systems of the UK, defied the forecasts of most analysts to maintain its sales lead for the sixth year in the last seven and propelled the industry to a record year.
According to the European group, Airbus and Boeing combined secured 2,140 gross new orders last year, surpassing the previous industry peak of 1,528 gross orders, for aircraft of 100 seats and above, secured by Boeing, Douglas and Airbus in 1989. (Boeing took over McDonnell Douglas in 1997).
Both Airbus and Boeing, the duopoly producers of large commercial jets, had record years with Airbus’s gross new orders tripling from the 370 won in 2004 and was double its previous peak of 556 set in 1998.
The high level of demand last year, which is expected to be the peak of the present ordering cycle, has been fuelled by the launch of key new aircraft, strong demand from low cost carriers, the rapid growth of aviation in Asia in particular in China and India, and also by the high oil price, which is placing an ever greater premium on the fuel efficiency of new aircraft.
Boeing, which had expected to outsell Airbus by the number of units for the first time since 2000, gained large consolation by selling more aircraft by value, as it won the battle for new orders for the most lucrative wide-body long-haul aircraft.
According to Airbus figures the European group won 52 per cent of the world market by units, but Boeing won 55 per of the market by value, as it beat Airbus in a series of key strategic sales campaigns for long-haul jets at leading airlines including Qantas, Cathay Pacific and Emirates and won over some traditional Airbus customers such as Air Canada.
The twin engine Boeing 777 large capacity long-haul jet established a wide lead over the rival four engine Airbus A340 and Boeing also led in the toughly contested segment for long-range, medium capacity 250-300 seat jets, where its 787 Dreamliner, which went on sale at the beginning of 2004, outsold the rival A350, which came to the market a year later. They will enter commercial service in 2008 and 2010 respectively.
Airbus maintained its overall lead by units by winning record orders for its A320 family of narrow body, single aisle jets, which with 918 new orders, many from start-up low cost carriers around the world, accounted for 82.6 per cent of its orders last year.
Boeing sold 569 of the rival 737 family, which accounted for 56.8 per cent of its net orders.
The European group said that it had secured 1,055 net orders last year, after cancellations and conversions, compared to the 1,002 net orders announced by Boeing.
It also delivered more aircraft than Boeing for the third year in succession as its deliveries rose to 378 from 320 in 2004 and beat the previous record of 325 set in 2001.
Boeing production was hampered by a strike late in the year, but the size of the Airbus order backlog, which totalled 2,177 at the end of December, up from 1,500 a year earlier, is expected to maintain its deliveries lead for several more years, as both groups seek to raise production.
Airbus said that its turnover had risen to €22.3 billion in 2005 from €20 billion a year earlier and said that it had achieved an operating profit margin above its target of 10 per cent.
Gustav Humbert, Airbus chief executive, said that “2005 was a record year for the whole industry and for Airbus in particular.
“Airlines have never ever placed so many orders, a sign that they are very optimistic about the future of air transportation, with also a lot of new carriers emerging and bringing cheap air travel to an increasing number of consumers. But it also reflects the need for more modern equipment to face the rising fuel prices.”
There is some question as to what Airbus calls a "firm order" as opposed to a commitment, and whether they use the same standards as Boeing. For example, Airbus counted their sale of 150 A32x aircraft to China as a firm order for December, but Boeing did not count their deal to sell 70 737s to China, made at the same time, as a firm 2005 order. John Leahy, Airbus' top salesman, also has some credibility issues with regards to some of his public statements.
Nevertheless, 1,111 airplanes is an enormous number, especially given that Boeing also sold over 1,000. Each manufacturer roughly tripled their 2004 sales and blew away their respective prior sales records.
Considering Airbus is consortium subsidized by nation states...I take it as a win by BOEING.
Plus, as you postulate, Airbus's numbers are probably bogus.
Doesn't some analyst have an apples-to-apples comparison?
Boeing has a lock on the large, growing, lucrative Asian market.
Everytime I see an airbus announcement, it's for some country or company saying they really sorta kinda are definately going to buy an airbus sometime in the next five years.
When I see boeing announcements, they are firm planned sales.
And of both companies' sales, which will actually deilver the most planes on time?
Boeing, which had expected to outsell Airbus by the number of units for the first time since 2000, gained large consolation by selling more aircraft by value, as it won the battle for new orders for the most lucrative wide-body long-haul aircraft.
Eight paragraphs down....
These are claimed to be firm, signed, definite sales, and Airbus has claimed to have taken a down payment on each of those airplanes. However, the amount of any such down payment is not public, and it's entirely possible, especially from all the hopeful startups (some of which don't yet even have an operating certificate), that the deposit in some cases was 1 Euro or some other token amount. Airbus has long said (and I agree) that deliveries, not even firm orders, is what counts, since some portion of even firm orders always get cancelled, and that portion is higher with startups that have yet even to start operating.
I believe that there is a definition of "order" under which Airbus sold 1,111 airplanes in 2005, and I believe that there is a definition of "order" under which Boeing sold 1,002 airplanes in 2005. I can't say for sure, but prior history leads me to speculate that the problem is those definitions may not be the same.
Sounds like the way Democrats count votes.
An analyst could probably sort at least some of this out, unless some of the contracts are secret.
Another consideration barely touched on is that Airbus may be outselling Boeing with some of its older models, but Boeing is doing better with models that will be sold in the future.
Finally, Airbus has a political advantage, selling to the countries in its own consortium, countries who don't dare offend the French, and countries who hate or envy the U.S.
plus the Thailand situation where they flat out blackmailed them into buying Airbus
It is important to remember that following WWII, France set out to assert itself as a leader in the field of aviation again. It did this by building the largest, most impressive flying boats ever built for passenger service.
That spirit lives on with the Airbus 380. The only question remains is if Airbus will survive the 380.
No, that sounds like the way they take polls. Then, when election day comes around, we find out what the "real" numbers are!
I wonder whether Airbus has to comply with Sarbanes-Oxley. If only Boeing does, I trust their numbers more.
But when it comes to the profit makers (the bigger twin isles) Boeing far outpaces Airbus for the year.
What would you consider to be the more important number, if you were to invest your hard-earned money into a company's stock? The number of units sold or the total value of those units sold?
This paragraph pretty much sums it up: Boeing has more potential revenue on the table than Airbus, period. I mean, who cares how many airplanes were sold; what I want to know is how much money are you going to make on your product.
That's because a large fraction of these sales are the planes that are the lucrative moneymakers: the 777 and 787. These two planes will replace a large number of older widebody jets in long-range service; is it small wonder why Airbus is scrambling to catch up with the A350 program?
Well, a European corporation certainly doesn't have to comply with U.S. accounting rules, and in fact the EU rules are different. I don't know whether it makes a difference in the reporting of the number of units sold, although I've been reading things that indicate Airbus is counting as "orders" certain contracts that, were the contract with Boeing, Boeing would not count as a firm order.
European taxpayers have already covered the A380. The company funds development of new types with loans from EADS member governments. If the aircraft does not turn a profit, the loan is forgiven.
Airbus claims that these subsidized loans, which don't have to be repaid unless a profit is turned (and I have to wonder who does the accounting to determine profit or loss), are the same as Boeing getting government funds to build military aircraft, and then using some military technology in its civilian products. It remains to be seen whether the WTO agrees with that argument, although I do not.
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