Day 2 At Paris Air Show: Boeing Gives NMA Timeline, Airbus Shelves A350 Stretch

| About: The Boeing (BA)
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Summary

Boeing continues to bag orders for the MAX 10.

Airbus shelves A350 stretch.

Jet makers accumulate 588 orders and commitments on second day valued $61.3B.

The bi-annual Paris International Airshow has started and traditionally the Paris Air Show, Farnborough International Airshow and Dubai Airshow are used as a stage to announce big orders. In this article, I will have a look at the order inflow on Day 2 of the Paris Air Show and notable news items. In the coming days, I will be covering news and orders for Boeing (NYSE:BA), Airbus (OTCPK:EADSF), COMAC, Embraer (NYSE:ERJ) and Bombardier (OTCQX:BDRAF).

If you missed the order overview of Day 1, you can find it here.

http://www.cityam.com/assets/uploads/main-image/cam_standard_article_main_image/2017/06/boeing1-59479325f39d1-5947954896103.jpg

Source: The Boeing Company

Boeing

Yesterday, Boeing started off with a bang launching the Boeing 737 MAX 10 with 240 orders and commitments for the jet. Today there were no new aircraft launches, but Boeing did share its current market outlook. The jet maker now views the aircraft market for the coming 20 years as a $6 trillion market, upping the deliveries to 41,030 aircraft, up 1,410 compared to last year’s forecast.

Boeing also shared some details on the Boeing 797 or NMA as Boeing still calls it, which as expected is a 787-like aircraft with a new fuselage design and possible service entry in 2025.

Also on the second day of the Paris Air Show Boeing had some order announcements.

Firm orders:

  • Aviation Capital Group ordered 20 Boeing 737 MAX 10 aircraft.
  • Okay Airways ordered eight Boeing 737 MAX 10 aircraft and eight MAX 8 aircraft.
  • Ryanair ordered an addition 10 Boeing 737 MAX 200 aircraft.
  • CALC ordered 50 Boeing 737 MAX jets divided between 35 Boeing 737 MAX aircraft and 15 Boeing 737 MAX 10 aircraft.
  • United Airlines (UAL) converted an existing order to 100 orders for the Boeing 737 MAX 10 and four Boeing 777-300ER aircraft.
  • Ethiopian Airlines and Blue Air were unveiled as customers behind orders for 10 and six Boeing 737 MAX aircraft that were previously listed as unidentified.

Today’s firm orders reached 199 for Boeing, four wide body jets and 195 narrow body jets. The deals carry a list price of $25.1B, but after discounts, the deal can likely be valued closer to $11.4B.

Memoranda of Understanding signed:

  • Okay Airways signed a MoU for five Boeing 787-9s.
  • Avolon signed a MoU for 75 Boeing 737 MAX 8 aircraft and options 50 Boeing 737 MAX 8s.
  • Azerbaijan Airlines signed for four Boeing 787-8 aircraft.
  • Japan Investment Advisers signed a MoU for 10 Boeing 737 MAX 8.
  • Ethiopian Airlines committed to two Boeing 777F aircraft.

Today’s order intentions reached 146 (including options) for Boeing - 11 wide body jets and 135 narrow body jets. The deals carry a list price of $18.1B, but after discounts, the deal can likely be valued closer to $8.4B. This would bring the orders and commitments for Boeing on Day 2 to 345 aircraft with a catalog value of $43.2B and $19.7B after discounts. It is interesting to see that there didn’t seem to be a fade in order inflow on the second day of the show as we usually see during the big air shows.

On the second day of the Paris Air Show, Boeing continued announcing commitments for the MAX 10. Per my calculations, the orders and commitments for Boeing’s biggest 737 member now stands at 300.

Airbus

On the first day of the show, Airbus showcased its development study for the Airbus A380plus. I am not convinced by the A380plus and was hoping on news for the A350-1100 or -2000. That news came today when Fabrice Bregnier said they can do a stretch any time, but he doesn’t believe today’s market is up to that. With that, Airbus stays focused on the market spot where Boeing had so much success with its Boeing 777-300ER.

Firm orders:

  • Delta Air Lines (DAL) ordered 10 Airbus A321ceo aircraft.
  • Ethiopian Airlines was revealed as the customer for 10 A350-900, which was previously booked as an unidentified order.

Today’s firm orders reached 10 for Airbus, zero wide body jets and 10 narrow body jets. The deals carry a list price of $1.2B, but after discounts, the deal can likely be valued closer to $0.5B.

Memoranda of Understanding signed:

  • Viva Air Colombia signed for 35 A320neo airframes and 15 Airbus A320ceo aircraft.
  • CDB Leasing signed for 30 A320neos and 15 A321neos and will convert 15 existing orders for the A320neo to the bigger A321neo.

Today’s order intentions reached 95 (including options) for Airbus - zero wide body jets and 110 narrow body jets. The deals carry a list price of $12.3B, but after discounts, the deal can likely be valued closer to $5.5B. This would bring the orders and commitments for Airbus on Day 2 to 120 aircraft with a catalog value of $13.5B and $6.0B after discounts.

During the first two days Airbus increased its order and commitments tally to 232, while Boeing is already at 685 orders and commitments. While this gap is big, I wouldn’t count out Airbus just yet and it is more than fair to mention that Boeing has the advantage of a new jet launch during the show and some of its order announcements are conversions rather than new orders, so we will see some cancellations for some MAX aircraft as soon as the MAX 10 orders end up in the order books.

In other news…

On the second day of the air show, Embraer received a total of 51 orders and commitments valued at $3.0B.

ATR signed a deal with Air Senegal and forecasted demand for 300 ATR aircraft in the Africa and Middle East for the coming 20 years.

SpiceJet intends to order 25 Q400 aircraft with purchase rights for another 25, while Ethiopian was unveiled as the previously unidentified customer for five Q400s. The value of the new commitments is $1.6B.

The smaller jet makers announced 108 orders and commitments on Day 2 valued $4.8B.

Conclusion Day 2 Figure 1: Order overview Day 2 Paris Air Show 2017 (Source: AeroAnalysis.net)

Day 2 of the Paris Air Show was primarily a show day for Boeing, again, where it accumulated 345 orders and commitments versus 120 for Airbus. The smaller jet makers added 103 orders and commitments bringing the order and commitments total for Day 2 to 588. After day 2, Boeing is in the lead, but Airbus likely has some big order announcements stacked as well.

Important to note is that while a soft order inflow was expected for the Paris Air Show, orders and commitments exceeded the figures of the 2015 Paris Air Show and the 2016 Farnborough Air Show and Day 2 brought even more commitments and orders than Day 1 of the air show.

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Disclosure: I am/we are long BA, DAL.

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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