A Look At Airbus' Commercial Orders And Deliveries In February 2016

| About: Airbus Group (EADSF)

Summary

Most noteworthy is the loss of 7 orders for the A330ceo.

Airbus is having a very slow start so far.

First A350 was delivered to Singapore Airlines.

In my previous article I had a look at the commercial orders and deliveries for Boeing (NYSE:BA) in February. As Airbus (OTCPK:EADSF/OTCPK:EADSY) and Boeing fight out an annual battle each year, it is also interesting to have a look at the Airbus orders and deliveries.

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Orders

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Figure 1: Airbus orders (up until) February 2016 (Source: AeroAnalysis.net)

In January, Airbus booked 16 orders, with 14 orders for its wide body product and 2 orders for their narrow body aircraft. In February, Airbus booked just 2 orders, a 94% drop.

At list prices, the orders are valued at $196 mln, but after discounts the orders have a market value of $78.4 mln:

  • An undisclosed customer order 2 Airbus A320ceo aircraft
  • Airbus received 7 cancellations for the Airbus A330-300 with an estimated market value of roughly $720 mln.

February was an exceptionally weak month for Airbus. The jet maker booked 2 gross orders, but had to remove 7 orders from the order books which leaves the jet maker with -5 net orders in February and 11 net orders year-to-date. Also in terms of value the loss is painful, Airbus won $78.4 mln in orders but had to remove $720 mln worth of orders or a $640 mln loss in orders.

Deliveries

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Figure 2: Airbus deliveries (up until) February 2016 (Source: AeroAnalysis.net)

Whereas Boeing guided lower, Airbus expects to be able to increase production year-over-year and has set a target of delivering more than 650 aircraft.

  • Deliveries were slightly lower than the monthly 54 that are needed, but are likely to pick up pace in the coming months
  • Airbus delivered its first A350 to Singapore Airlines
  • Lower delivery volume is likely caused by transition to the Airbus A320neo, which ran into some minor problems.

Year-over-year deliveries were flat, but I do not see any problems with that. The second half of 2016 will be more decisive for Airbus.

Book-to-bill ratio

Last year Airbus had a book to bill ratio in excess of 1.5. Also in 2016 the jet maker expects to be able to book more than 1 order for each airframe it delivers. In February the book-to-bill ratio was .043. Year-to-date the book-to-bill ratio is .17. Despite orders inflow and deliveries picking up pace throughout the road towards reaching its targets will be a long one for Airbus.

Conclusion

Despite order inflow being unnaturally weak I expect order inflow to pick up pace in the coming 3-5 months. Airbus expects its order book to grow in 2016, but with a book-to-bill ratio of .17 this will be a challenge.

Disclosure: I am/we are long BA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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