Airbus beats Boeing in 2010

Monday, 24 January 2011 00:37 -     - {{hitsCtrl.values.hits}}

TOULOUSE, France (Reuters): European planemaker Airbus celebrated a surprise win in the annual orders race against Boeing with the 10,000th plane sale in its 40-year history, part of a $5 billion order from Virgin America.

Last-minute orders for 200 planes in December pushed Airbus past its U.S. rival for a third year. Both aircraft makers are flying high on demand from emerging economies and low-cost airlines and a shift towards less fuel-thirsty jets.

Boeing, whose net orders were hit by cancellations in 2009 due to delays to its 787 Dreamliner, bounced back in 2010. But Airbus still managed a 52 percent market share.

EADS subsidiary Airbus said last week it sold 644 planes worth over $84 billion at list prices in 2010, 19 more than Boeing. For the eighth year running, Airbus also delivered more planes than its U.S. rival, hitting a company record of 510, while Boeing deliveries fell 4 percent to 462.

Aircraft manufacturers only get paid on delivery, usually at least 18 months after purchase.

After cancellations, 2010 net orders at Airbus were 574 against 530 planes for Boeing.

Both companies have been recovering from an industry recession which saw combined demand for their planes fall by more than two thirds in 2009 as passenger and cargo air traffic plummeted.

Rising air travel in fast-growing economies and a drive for more fuel-efficient aircraft has since spurred a revival in demand. Planemakers boast thousands of orders, potentially including the world’s largest by volume from India’s IndiGo.

“These figures show the economy is improving. We have dodged the bullet on a double-dip recession. Aviation is growing again because of Asia, low-cost carriers and emerging markets,” Airbus sales chief John Leahy told reporters.

Although planemakers often sell at a discount to their catalogue prices, Leahy said both revenues and pricing were improving as Airbus hit around 30 billion euros of turnover in 2010. Parent EADS will report full figures in March.

Against this rosier backdrop, the only negative was oil prices, Leahy said. Airbus is also struggling to pare back excess production costs for its A380 superjumbo, which threatens to soak up resources needed for other key development projects.

Airbus said it would hire 3,000 people in 2011, half of which will be new staff as it starts assembly of the future A350, a rival to Boeing’s Dreamliner.

Airbus’s late spree included the first firm purchase of a revamped A320 passenger jet, the A320neo, by Richard Branson’s California-based low-cost airline Virgin America.

The British entrepreneur, on crutches after a skiing injury, was in Toulouse to mark the 10,000th order in Airbus’s history. Boeing has sold 20,663 commercial planes since January 1958, the first month for which records are available on its website.

Both firms more than doubled their order intake in 2010 as airlines staged a stronger-than-expected recovery. They share the commercial market for large airplanes with at least 100 seats but face challenges from Canada, China, Russia and Brazil.

Chief Executive Tom Enders said Airbus would increase commercial deliveries to 520-530 planes in 2011 and would sell more than it delivered, without giving a more precise goal.

Enders said Airbus was mulling another increase in targeted wide-body production to 10 a month from nine. Demand for the A330, one such plane, has been buoyed by delays to Boeing’s futuristic, fuel-saving Dreamliner.

China to buy Boeing planes worth $ 19 b

WASHINGTON: China plans to buy 200 Boeing aircraft worth an estimated $19 billion, the White House said last week during a state visit by President Hu Jintao to the United States.

The order includes 737 medium-range and 777 long-range jets, Boeing said in a statement confirming the deal.

The aircraft will be delivered over the three-year period 2011-2013, Boeing said.

“Boeing is pleased to have received final approval today from the Chinese Government confirming a $19 billion aircraft agreement,” it said.

Boeing jets comprise more than half of all commercial jetliners operating in China, the company said.

If forecast that China’s air travel and cargo system will need 4,330 new aircraft over the next 20 years, worth more than $480 billion.

“We value China’s support for our products and its confidence in Boeing,” said Boeing Commercial Airplanes CEO Jim Albaugh.

Boeing delays Dreamliner delivery to Q3

Reuters: Boeing Co on Tuesday delayed first delivery of the 787 Dreamliner to the third quarter of 2011, clearing up doubts about the schedule after a November electrical fire on a test flight forced an emergency landing.

The news bolstered Boeing shares as the industry breathed a sigh of relief that the widely expected delay was not longer. The Dreamliner is already nearly three years behind its original schedule due to glitches in the supply chain and labor problems.

“We think investors widely expected a delay of this magnitude, and given the recovery in the stock price, have become comfortable that the 787 problems are not a show stopper, and will not have a meaningful impact on the positive trajectory of this aerospace upcycle,” said Robert Stallard, an aerospace analyst at RBC Capital Markets.

“If Boeing can avoid further 787 issues, we think improving airline and industry fundamentals will continue to benefit the stock, and potentially move its valuation higher,” Stallard said.

Boeing said the new delivery date reflects the impact of the November fire and the time required to produce, install and test updated software and new electrical power distribution panels in the flight test and production planes.

“This revised timeline for first delivery accommodates the work we believe remains to be done to complete testing and certification of the 787,” said Scott Fancher, vice president and general manager of the 787 program, in a statement.

“We’ve also restored some margin in the schedule to allow for any additional time that may be needed to complete certification activities,” Fancher said.

The first Dreamliner delivery has been delayed repeatedly due to snags in the supply chain and labor disputes. Boeing last revised the 787 delivery schedule in September because of a delay in the availability of a Rolls-Royce engine needed for the final phases of flight testing.

Boeing said financial forecasts and anticipated initial 787 deliveries for 2011 will be discussed after the company reports its fourth-quarter earnings on Jan. 26.

Many industry experts had long expected the delay to Japan’s All Nippon Airways, but opinions differed on how long it might be.

“We are pleased, as it should settle some investors’ fears,” said Alex Hamilton, managing director of EarlyBirdCapital. “That said, they haven’t done a good job of achieving the goals of the 787 schedules.”

Boeing currently has 847 orders for the Dreamliner, which promises a quieter and more comfortable ride for passengers.

Boeing has not said how much it has invested in the Dreamliner nor how much it has spent. The company offers two versions of its Dreamliner which lists between $185.2 million and $218.1 million. Boeing receives payment for airplanes at delivery.

Boeing competes for orders with European rival Airbus, an EADS component, which on Monday celebrated a surprise win in the annual orders race with the 10,000th plane sale in its 40-year history, part of a $5 billion order from Virgin America.

Last-minute orders for 200 planes in December pushed Airbus past Boeing for a third year. Boeing, whose net orders were hit by cancellations in 2009, bounced back in 2010. But Airbus still managed a 52 percent market share.

Airbus raises aircraft prices

PARIS (Reuters): Airbus announced an average 4.4 percent increase in its aircraft catalogue prices on Tuesday, citing high production investments and a weak dollar.

The move comes weeks after rival planemaker Boeing announced an average 5.2 percent price increase.

Airbus and Boeing), which both saw a sharp recovery in business last year, often sell planes at a discount to catalogue prices, but Airbus sales chief John Leahy said on Monday that both revenues and market pricing were improving.

Airbus had 52 percent of the world market in net orders and 52.5 percent in deliveries in 2010, according to data released LAST WEEK.

Airbus is squeezed financially by a weak dollar because planes are sold in dollars and enter the EADS accounts in euros -- a currency in which it also has a high proportion of its production costs.

The overall price hike includes an 8.4 percent increase in the value of the Airbus A380, which brings the catalogue value of the world’s largest airliner to $375 million.

Airbus said this reflected the plane’s capacity to generate revenue for airlines, but the planemaker has also been struggling to bring down unbudgeted production costs in the past year.

Airbus also confirmed on Monday it was mulling a 10 percent hike in production of its best-selling A320s, on top of existing plans to raise output from 36 planes a month to 40.

A decision is due shortly on whether to boost production as high as 44 planes from 2012, senior executives said. The plans, first reported by Reuters last November, echo rising demand as airlines recover more quickly than expected from recession. But they are also seen as an extra bulwark against a weak dollar alongside price hikes.

Industry sources say a majority of Airbus’s variable costs on the single-aisle family production lines are in dollars, meaning higher output also helps to tame currency effects.

Airbus meanwhile received a potential boost on Tuesday when Boeing announced a further delay in first delivery of its 787 Dreamliner to the third quarter. Delays in the futuristic, lightweight Boeing plane have boosted sales of Airbus A330s, a previous generation of mid-sized jets whose list price rises to $222 million.