Boeing, Airbus To Battle It Out At Paris Air Show

This is source I found from another site, main source you can find in last paragraph

The order battle between Boeing (NYSE: BA) and Airbus (OTCPK:EADSF, OTCPK:EADSY) is one way for the companies to flex their muscles, next to marketing their respective products as the best solution with the highest fuel efficiency and passenger comfort. Even though the orders (in terms of value) are in no way a reflection of financial performance, it's important to have a look at the order inflow. That's because the order tallies give a nice impression of which manufacturer has the best mix of discount, comfort, slot availability and efficiency and it gives an idea of the overall health of the aircraft market and appetite for new aircraft.

In this article, I will look at the order inflow during September for both manufacturers and their role in the narrow and wide body markets.

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Overview for August

Airbus and Boeing together hauled in 128 orders in September compared to 104 in the same month last year. Order inflow increased by 24 units, but there is no specific reason other than timing for this increase. Both manufacturers were able to add some wide body orders to their order books. Looking at the division of the orders in September, Boeing can be marked as the clear winner: Airbus received 56 orders while Boeing received 72 orders.

In September, Boeing booked 72 orders, 11 wide body jets and 61 single aisle aircraft:

  • A Business jet customer ordered a single Boeing 737 MAX.
  • Russian airline Aeroflot ordered 6 Boeing 777-300ERs.
  • An unidentified customer ordered 8 Boeing 737 MAX aircraft.
  • A second unidentified customer ordered 50 Boeing 737 MAX aircraft.
  • A third unidentified customer ordered 5 Boeing 787-9 aircraft.
  • The US Navy ordered 2 C-40A as was disclosed in the September defense contracts overview.

Read the full order and delivery report for Boeing in September 2017 here.

In September, Airbus booked 56 orders, 16 wide body jets and 40 narrow body jets:

  • United Airlines (UAL) converted an order for 35 Airbus A350-1000s to an order for 35 Airbus A350-900s and ordered 10 additional aircraft.
  • An undisclosed customer ordered 2 Airbus A320neos and 2 Airbus A330-900neo aircraft.
  • Peach Aviation ordered 4 Airbus A320ceo aircraft.
  • Air Lease Corporation (AL) ordered 2 A321ceo aircraft.
  • Cathay Pacific ordered 32 A321neo aircraft with CFM engines.
  • An undisclosed customer ordered 4 Airbus A330-300s.

Read the full order and delivery report for Airbus in September 2017 here.

Boeing and Airbus both are working through finalizations of commitments announced at the 2017 Paris Air Show. Next to those finalizations, it seems that order inflow is gaining traction slightly. Positives during the month were the orders for the Boeing 777, Boeing 787, Airbus A330 and Airbus A350. I think that especially Airbus will be happy that United Airlines committed to the Airbus A350, but we should not forget about the order for the Airbus A330-900. The A330neo presents itself as the more cost-efficient solution compared to the Boeing 787, but has gained very little ground. So the order this month, despite minor, certainly is a good sign for Airbus.

Overview Year-to-date

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Figure 1: Infographic Orders September 2017 (Source: >AeroAnalysis.net)

Airbus received 48 cancellations up until August, leaving the jet maker with 271 net orders - up from the 215 orders a month earlier. Year to date, Boeing received 565 orders and 67 cancellations, bringing its net orders to 498 – up from 426 a month earlier. Looking at the net orders, Boeing is having a lead over Airbus, but it only takes one or two bad months and that lead could slip. Looking at the leads that Boeing still has, a steady rate of finalization of aircraft deals should put Boeing firmly on top in the order battle.

Order inflow in September primarily consisted of narrow body orders. Roughly 80% of the orders was an order for a narrow body and 20% for wide body aircraft. Noteworthy is that whereas Boeing usually takes the crown in the wide body orders, Airbus ended up on top this month. Fifteen percent of the Boeing orders was a wide body jet, while that percentage was nearly 30% for Airbus.

Conclusion

September was quite a good month, especially for wide body aircraft. Airbus saw interest for its Airbus A330 aircraft and United Airlines committed to the Airbus A350, both of which are positive signals for the European jet maker.

Boeing continues to sell its wide body jets quite well, where orders for its wide body products are more rule than exception.

For investors, it's important to note that Boeing and Airbus have healthy backlogs allowing them to increase production on their narrow body programs, which should positively impact financial performance. Both jet makers also are working on cost cutting on their newest wide body jets, where Airbus also is working on ramping up production. Currently, I like Boeing shares a bit better because of the huge free cash flow the company generates and the significant steps it has taken to de-risk the program since 2016.

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For those interested in the Paris Air Show orders, I have set up a page in which you can filter the order announcements per type, customer, region, etc.

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.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

This is source I found from another site, main source you can find in last paragraph

Source : https://seekingalpha.com/article/4112530-boeing-airbus-order-battle-september

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