Boeing Was Crushed During FIA 2014

Aug. 4.14 | About: The Boeing (BA)

Summary

Airbus clear winner on the FIA 2014.

Boeing still ahead in the order battle.

Launch of the A330neo is a success.

On the 14th of July the Farnborough International Airshow, an international aerospace exhibition, started. Traditionally it is also on this stage where both Boeing (NYSE:BA) and Airbus (OTCPK:EADSF) make announcements regarding orders and airplanes and where airlines and aircraft lessors place major orders.

This article will cover the orders and announcements being made regarding Boeing and Airbus aircraft during the Farnborough Airshow 2014 (NYSEARCA:FIA).

Announcements Boeing:

  1. Boeing announced a modification to the 737 MAX 8 as a response to a modification to the Airbus A320neo that would fit 189 passengers into the A320neo. Boeing increased the passenger capacity for the MAX 8 from 189 to 200, targeting low cost carriers. The modification means a lower seat pitch (less comfort) and an extra emergency exit, allowing more passengers on the airplane, thereby also reducing the costs per seat. In reality airlines will sell 199 tickets only, since having 200 passengers on the airplane requires an extra flight attendant on board.

Orders for Boeing aircraft:

DAY 1

  1. Monarch Airlines agreed to buying 30 737 MAX 8s, the deal should be finalized soon. Catalogue value: $3.1 billion
  2. Avolon signed a commitment for 6 787-9 Dreamliners and 5 737 MAX 9 aircraft. Catalogue value: $2 billion
  3. Okay Airways ordered 6 737 MAX 9s and 4 Boeing 737-8 aircraft, also converting 5 orders for the 738 into the 739. Catalogue value: $980 million.

Total orders first day: 56 orders ($ 6.1 billion), 0 options

DAY 2

  1. ALC ordered 6 777-300ERs and 20 737 MAX 8s. Catalogue value: $3.9 billion
  2. Intrepid Aviation placed an order for 6 777-300ERs and an option for 4 more. Catalogue value: $3.2 billion
  3. CIT announced an order for 10 787-9 Dreamliners. Catalogue value: $2.5 billion

Total orders second day: 42 ($ 8.32 billion), 4 options ($1.3 billion)

DAY 3

  1. Hainan Airlines and Boeing were finalizing an order for 50 737 MAX 8s. Catalogue value: $5.1 billion
  2. Qatar Airways finalized an order for 50 777-9Xs announced on the Dubai Airshow. Additionally Qatar Airways took an option for 50 more 777-9Xs, ordered 4 777Fs and took an option for 4 more freighters and firmed up the option for 50 777-9Xs. Catalogue value (for all 108 airplanes): $40.1 billion / Catalogue value options: $20 billion
  3. Air Algerie ordered 2 Boeing 737-700 aircraft. Catalogue value: $0.15 billion

Total orders third day: 106 ($25.25 billion), 4 options ($1.2 billion)

DAY 4

  1. MG Aviation ordered 2 787-9s. Catalogue value: $0.5 billion

Total orders fourth day: 2 ($0.5 billion), 0 options

Total value of the orders: $40 billion, options valued $2.5 billion

It has to be pointed out that the order for 50 777-9Xs was a finalization of an order announced on the Dubai Airshow, the option for 50 more 777Xs is new.

Aircraft

Unfilled orders

Orders / Commitments

Options

Change

737

1832

11

0

+0.6%

737MAX

2099

116

0

+5.5%

747-8I/F

50

0

0

-

767F

49

0

0

-

777

280

16

4

+5.7%

777X

336

50

0

-

787

1031

18

0

+1.75%

TOTAL

5677

211

4

+3.7%

Click to enlarge

Announcements Airbus:

  1. Airbus launched the A330neo, an airplane that has a 14% better fuel consumption per seat over the A330 and sports more seats and a bigger range (increased by 300 nm), this could mean that the Airbus A350-800 will be canned and Airbus will try converting orders for the A350-800 into Airbus A330neo orders.

Orders for Airbus aircraft:

DAY 1

  1. Air Lease Corporation (ALC) announced a Memorandum of Understanding for 25 Airbus A330-900neo aircraft, thereby becoming launch customer for the A330neo. Catalogue value: $6.9 billion.
  2. Air Lease Corporation also announced a firm order for 60 Airbus A321neo aircraft. Catalogue value: $6.6 billion
  3. AerCap firmed up an order, adding 50 Airbus A320neo aircraft to Airbus' order book. Catalogue value: $5.6 billion
  4. International Aircraft Group converted an option for 20 Airbus A320neos into a firm order. Catalogue value: $1.9 billion

Total orders first day: 155 orders ($21 billion)

DAY 2

  1. Airbus received a mega-order for 110 A320neos and 5 Airbus A320s from SMBC Aviation Capital. Catalogue value: $11.8 billion
  2. BOC Aviation placed an order for 36 A320neos and 7 A320ceos. Catalogue value: $4.2 billion
  3. CIT ordered 15 A330neos and 5 A321ceos. Catalogue value: $4.7 billion
  4. Avolon committed to order 15 A330neos. Catalogue value $4.1 billion
  5. Air Asia X signed a MoU for 50 A330neos. Catalogue value $13.75 billion

Total orders second day: 243 orders ($38.9 billion)

DAY 3

  1. Air Mauritius signed a MuO for 4 Airbus A350-900s. Catalogue value: $1.2 billion

Total orders third day: 4 orders ($1.2 billion)

DAY 4

  1. HKAC finalized an order for 40 A320neos and 30 A321neos, following a commitment for 60 aircraft last year. Catalogue value: $7.7 billion
  2. Transaero signed a MoU for 8 A330ceos and 12 A330neos. Catalogue value: $5.3 billion
  3. An undisclosed airline ordered 4 A330neos. Catalogue value: $1.1 billion

Total orders fourth day: 94 orders ($14.1 billion)

Total value of the orders: $74.1 billion

Aircraft

Unfilled orders

Orders / Commitments

Options

Change

Airbus A320

1711

17

0

+0.99%

A320neo

2661

346

0

+13%

Airbus A330

243

8

0

+3.3%

Airbus A330neo

-

121

0

-

Airbus A350

742

4

0

+0.5%

Airbus A380

189

0

0

-

TOTAL

5546

496

0

+6%

Click to enlarge

Conclusions:

  • With over 121 orders and commitments the Airbus A330neo launch is a success. This however makes the Airbus A350-800 redundant and can be seen as yet another hit for the A350 program after the recent cancellation from Emirates for the A350-900
  • New orders for the A350 were small.
  • No orders for the Airbus A380 or the 747-8I.
  • The Airbus A320neo sells far better than the 737MAX while already having bigger order numbers. Boeing being one step behind when it came to introducing the MAX is showing in the order numbers.
  • Boeing was able to haul in orders for the older 777, for the 787 and for the new 777X.
  • Aircraft lessors stole the show on FIA 2014.
  • Looking at the order numbers, Boeing has been crushed by Airbus. Year-to-date Boeing's order numbers still look strong.

A final conclusion that can be drawn is that none of the companies did bad business on the FIA 2014. Not to imply that a bubble is forming, but one should take note that orders being placed are placed with significant discounts and that some low-cost carriers have been pushing back deliveries to trim the fleet, thereby ensuring that the expansion plans of the airlines do not interfere with passenger demand (meaning supply does not become bigger than demand).

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