Seeking Alpha

Boeing (BA) has finalized a booking from air-leasing company Aviation Capital Group for 60 737...

Boeing (BA) has finalized a booking from air-leasing company Aviation Capital Group for 60 737 MAX aircraft in a deal worth $6B at list prices, taking the number of MAX jets that have been ordered to well over 1,000. The planes will be equipped with new LEAP-1B engines from CFM International, which is a JV between GE (GE) and Safran unit Secma. (PR)
From other sites
Comments (2)
  • thomas85225
    , contributor
    Comments (563) | Send Message
     
    Pegasus order could increase Airbus A320neo lead over Boeing 737 Max

     

    Airbus may receive a 100-aircraft order from Pegasus Airlines, on top of the recent 100-aircraft order from Air Asia.
    Airbus’ A320neo seems to be pulling further ahead of Boeing’s 737 Max, with an order for 100 Airbus A320neos and A321neos expected from Turkey’s Pegasus Airline this week, according to a Bloomberg story, just after Air Asia confirmed a previously anonymous order for another 100 A320s last week.

     

    Currently Airbus has 61 percent of the market, with 1,579 firm orders for its re-engined A320neo series, versus 969 for Boeing.

     

    The Pegasus Airline order will notch Airbus further ahead if it is confirmed.
    What gives, especially since representatives of CFM International said, in a Dec. 4 visit to Seattle, that they’re guaranteeing equal efficiency gains to both Airbus and Boeing with the new LEAP engine?

     

    “I think fundamentally, you’re talking about an airplane that was designed in 1988 versus an airplane designed in 1965,” said Scott Hamilton, president of Leeham Co. LLC, referring to the A320 and the 737, respectively.

     

    Both airplanes are getting new engines, but Boeing has had to extend the front landing gear slightly to do that, and has had to work with a tighter space under the wing.
    “Boeing has so much more to do on Max than Airbus does on neo,” Hamilton said. “That is a fair marketing point that Airbus tries to use to its full advantage.”
    In addition, Airbus had a seven-month start, and Boeing only recently locked down most of the 737 Max’s design. Boeing is accelerating 737 production at its Renton factory, to work down a seven-year backlog.
    The Teal Group’s Richard Aboulafia contends that too much focus on week-by-week numbers misses the influence of established fleets on what are two very similar aircraft.
    “Depending on when these customers order, you will see the needle move back and forth over the next five years,” he said. “But right now it’s a matter of who’s ordering when, rather than who’s ordering what.”
    A big Turkish order could undermine that view, because Pegasus has traditionally been a Boeing customer.
    In addition, Hamilton contends that Airbus may be reaping the benefits of taking risks with startup carriers.
    Hamilton also suggests that the fact that Airbus is offering the Pratt & Whitney Geared Turbofan in addition to the LEAP engine, while Boeing is only offering the latter, may be helping Airbus.
    A320neo orders are about evenly divided between the two engine models.
    “Nearly all the people I’ve talked to in the airline and leasing industry tell me they think the GTF technology is better than Leap and has more growth potential,” Hamilton said. “But they have more confidence in CFM reliability and customer service than in Pratt.”

     

    STEVE WILHELM covers manufacturing, aerospace and trade for the Puget Sound Business Journal. Phone: 206-876-5427 | Email: swilhelm@bizjournals.com | Twitter: stevewilhelm108 Click here to sign up for the PSBJ Daily Update.
    3 Jan 2013, 12:25 AM Reply Like
  • GarryGR
    , contributor
    Comments (207) | Send Message
     
    Orders obviously do not equal revenue and profit, or for that matter, deliveries. Just consider the fact that Airbus has taken in far more orders than Boeing has in the last decade or more but this year, Boeing delivered more airplanes. Doesn't quite add up, does it?! :) Airbus has succeeded brilliantly at hyping the rather meaningless order numbers to make themselves appear more successful than Boeing. But when it comes to revenue, profits, Market Cap etc, well, that's another story.
    3 Jan 2013, 08:56 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs