Airbus loses to Boeing in annual jet order race

The logo of Airbus seen after a flight event presentation in Colomiers near Toulouse, France, on Nov 6, 2018.
The logo of Airbus seen after a flight event presentation in Colomiers near Toulouse, France, on Nov 6, 2018. PHOTO: REUTERS

LONDON • Airbus abandoned a five-year winning streak in the race for jetliner orders last year, slumping to its lowest share of the US$150 billion (S$203 billion) jet market in six years but narrowing a gap with US rival Boeing in plane deliveries.

The European firm said it had won 747 net orders, down 33 per cent from 2017 despite a hefty contribution from the Canadian A220 jet which it took over in July. Boeing won the order race for the first time since 2012 with 893 orders.

Airbus delivered 800 jets, up 11 per cent, including 20 of the small A220 model, leaving Boeing as the world's largest planemaker by manufacturing volume for a seventh straight year. Although Boeing missed its delivery target and Airbus had previously lowered its goal due to strains on the industry's global supply chain, strong demand for passenger jets expanded total deliveries by 8 per cent, the fastest pace in six years.

Still, investors are watching for signs that a longer-than-usual aerospace cycle is fraying amid concerns over key markets like China, although an order slowdown had been expected as manufacturers digest record production backlogs.

Planemaking chief Guillaume Faury said Airbus had achieved a "healthy order intake", with waiting lists for many new jets stretching up to seven years.

Insiders say its quest for new business has, however, been overshadowed in the past year by industrial problems, management changes and morale problems coinciding with a corruption probe. It also faced a challenging annual comparison after its former sales chief retired with a swan song deal in 2017 for over 400 jets that analysts said had anticipated future demand.

A resurgent Boeing has, meanwhile, been cashing in on greater availability and declining costs for its flagship 787 Dreamliner, while struggling to regain lost ground in the lucrative segment for large narrow-body jets above 200 seats.

  • 747

    Number of net orders Airbus won last year.

  • 893

    Number of net orders Boeing won last year.

Highlighting the pressure Airbus has been facing in the market for high-margin wide-body jets like the 787, the firm was outsold three to one by Boeing for a second year.

The order figures underscore Airbus' decision to take over the lightweight but loss-making Bombardier CSeries aircraft, generating 135 orders worth US$12 billion at list prices. Without that boost, Airbus took just 41 per cent of the core market in which it competes with Boeing, the lowest since 2009.

Mr Faury rejected the comparison, telling reporters the A220 was now "an integral part of the Airbus product range". He said Airbus had turned the corner after supplier problems sparked an end-year race to match the 800-unit delivery target.

Airbus reached a targeted production rate of 10 aircraft a month for its wide-body A350, company officials said. Among a handful of cancellations, Airbus officially recognised in its books the loss in 2014 of an order for 10 A380 superjumbos from Hong Kong Airlines, following negotiations.

The world's largest airliner is mostly dependent on Dubai's Emirates Airlines as Airbus slows output in the hope of a future upturn. Some analysts say the record backlogs of Airbus and Boeing still include dozens of other jets unlikely to be delivered, but both firms insist they only post valid contracts. "I think we are in a healthy situation to prepare the next couple of years," Mr Faury said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 11, 2019, with the headline 'Airbus loses to Boeing in annual jet order race'. Print Edition | Subscribe