16 Comments Add your own

• 1. Boeing Investor  |  January 2nd, 2008 at 7:10 pm

  Does it matter who won?

  What really counts is the dollar value of their respective orderbooks.

  Airbus has routinely throughout 2007 sold airplanes at such low prices, the value of their orderbook is not as impressive they would like us to believe.

• 2. Doug  |  January 2nd, 2008 at 7:40 pm

  Not only gross, but probably includes options and other “not finalized” orders too.

• 3. Chris Wallace  |  January 2nd, 2008 at 7:56 pm

  My (Monopoly) money is on Airbus because they have a significant number of MoUs and LoIs that number something like 300-400 or even more they could close. This might explain CNBC’s numbers, especially for Airbus, as they only list gross orders in their press releases, so you need to view their Excel spreadsheets to find the cancellations and the actual net numbers (which are there, contrary to the insinuations of some that Airbus never balances their order books).

  I am pleased to see the balance in both company’s orderbooks. In years past, Airbus has been heavily weighted in narrowbodies and Boeing in widebodies, but this year the entire product range for each company did well.

  And it is true that Airbus’ margins are expected to be much weaker then Boeing’s for the next 5-10 years, but they will recover more each year and there is something to be said on “making it up on volume”.

• 4. keesje  |  January 2nd, 2008 at 8:59 pm

  -> three winners (count in Embraer)

  folks Pavloving it must be price if Airbus wins a biggy must ask themselves if it is hard info they base this on, or repeating what even minded say they heard.

  On one having better future results then the other : equally subjective. Boeing is bleeding billions as we speak getting into producting the delayed 787 and 747-8. It is part of the business.

• 5. Boeing Investor  |  January 2nd, 2008 at 9:34 pm

  Bleeding billions?

  I take it you havn’t listened to any of the 787 media calls then otherwise you wouldnt have written that nonsense.

  Just how much has Airbus bled on the A380? $25bn in real terms.

  The A350xwb is no cheaper either - rumored at $16-20bn. Thats nearly $50bn, of which half is on a marginalized product with no chance it will ever break even!

• 6. Jacobin777  |  January 3rd, 2008 at 2:01 am

  Airbus has stated they won’t see margins of 10% for years (one can easily find the bloomberg news story on it)…That’s a fact.

  Actuarial companies give Airbus planes lower residual values (besides the A330s) when compared to a competing Boeing plane.
  That’s a fact.

  Boeing has made net $ billions in 2007, that’s a fact. Airbus/EADS has lost net hundreds of millions of $..that’s a fact.

  As Boeing Investor has stated, the A380 program has cost EADS > $20 and the A350 program will cost >$15 billion..

  Airbus will win the order…IMHO….

  More important is at what profit margins….

• 7. Chris Wallace  |  January 3rd, 2008 at 3:17 am

  Point of order:

  Boeing cleared around $7 billion in free cash this year while Airbus at best is expected to clear $800 million.

• 8. BeauNG  |  January 3rd, 2008 at 4:35 am

  Bleeding billions? They are showing a profit, unlike Airbus.

  How can Airbus have record sales and record deliveries and still post a loss?

  It obvious they’re buying market share.

• 9. Ken  |  January 3rd, 2008 at 1:41 pm

  I don’t know if anyone has noticed but there is something very bad happening with EADS stock, it’s plummeting dramatically and there seems to be no obvious cause. Prices this morning hit a low of $21.00 Euro, one analyst suggested that Airbus is losing money on every aircraft it sells due to the currency exchange rate.

• 10. Mark S  |  January 3rd, 2008 at 5:01 pm

  Profitability does not enter into to the equation for Airbus. Airbus is a make jobs consortium for the socialist European governments. Power 8, job cuts? Nothing substantive will happen, that would mean job losses which is politically unacceptable. Power 8 has been nothing more than “a look good effort” for the European tax payer after the gargantuan losses of the last two years related to the 380 project that the European tax payer has funded. Boeing has to make ROE, or the public markets will no longer allow it to raise capital. Airbus does not have to demonstrate ROE; it merely turns to sponsor governments for loans that do not have to be repaid if the project loses money. Because of how the two companies evaluate returns on their new projects many of the comparisons being made about how Boeing and Airbus approach their new projects lack a common reference point. Given the fundamental differences in how the two companies evaluate return for new projects, the importance of sales numbers loses relevance. Profitability and ROE drive the decisions of models and pricing at Boeing; jobs and feel good publicity drive the strategy at Airbus.

• 11. Chris Wallace  |  January 3rd, 2008 at 6:20 pm

  Airbus does not need to buy marketshare. What they need to do is stuff their current production lines until they are ready to put the A350 and A320RS into service. Just as Boeing needed to do for the 747-400 and still does for the 737NG until they were/are ready to deliver the 747-8I and 737RS.

  Airbus also needs a lot of deliveries over the next 5-10 years to provide cash to support the development of both programs. So they are raising production rates for both the A320 and A330 which means they need to keep filling the pipeline on the back end as deliveries empty it on the front.

  So they’re being aggressive (but not recklessly so) on A320 and A330 sales and it shows with the A330 having it’s best sales year ever and I expect the A320 will likely also break it’s own sales record.

  As to why Airbus is not making any money with record deliveries, the A380’s delays account for much of it. They were supposed to have delivered 21 planes by now, but instead have only delivered 1. Yet Airbus originally budgeted (and likely spent) as if they had delivered 21, so they came up well short in their revenues. And each of those frames they do deliver cost more to build then planned, which eats into the profit each frame contributes to Airbus’ bottom line. So they won’t be making as much money - and it’s taking longer to get what they are - as they expected.

• 12. keesje  |  January 4th, 2008 at 12:03 am

  Any OEM bringing into production a completely new airliner is bleeding billions. Compensating delays in an aggresive 800 plane backlog isn’t cheap either. Just because we are talking Boeing doesn´t mean we aren´t allowed to notice & write it down, are we?

  All the folks who have learned themselves to believe Airbus only sells because it uses subsidies to heavely discount aircraft please notice :

  - Historically Airbus aircraft have been more advanced incorperating eg fly by wire, more composites and load elevation systems.
  - Airbus aircraft are often wider more comfortable cabins (A320 vs 737, A380 vs 747, A350 vs 787)
  - Arbusses often have better cargo (container) capabilities (A320 vs 737, A300 vs 767, A310 vs 757, A330 vs 767.)
  - contrary to popular wisdom A320s have longer maintenance intervals then 737NG’ s
  - Airbus aircraft don´t have sixties technology onboard like 737, 757, 747, that influences maintenance costs.

  That is why hundreds of airlines have replaced thousands of Boeing aircraft with Airbus aircraft during the last 20 years.

  Airbus had a ball for the last 8 years with the A330, no credible competition during an economic boom is the biggest reason. Same for the A380 the next 8 yrs..

  I know this year didn’t progress as many expected / hoped (Airbus outselling / producing Boeing again unexpectedly http://www.komotv.com/news/boeing/7261311.html , 787 being delayed afterall, A380 succesfull entry into service , A350 stealing major contracts, BA going A380 etc.)

  Hiding behind “subsidies” and “discounts” might be comforting for some but then again ask yourself, how innovative was Boeing during the birth of Airbus, inbetween the 747 and 787..

  The currency thing might help Boeing and hurt Airbus at this moment but is it a Boeing achievement / Airbus fault ?

  The falling dollar might be nice at this moment but have you thought why it is falling / how the rest of the world is going to react? Who do you think is giving you all the moeny you are spending, where is it coming from? When is payback day?

• 13. Chris Wallace  |  January 4th, 2008 at 5:52 am

  The final tally for Boeing in 2007 was 1413 sales. Not bad at all.

• 14. Boeing Reports Record Ord&hellip  |  January 4th, 2008 at 8:10 am

  [...] 4, 2008 While the race to the finishing line may have been “won” with the first declaration of orders, Boeing certainly broke its [...]

• 15. Jacobin777  |  January 4th, 2008 at 3:32 pm

  [...]So they’re being aggressive (but not recklessly so) on A320 and A330 sales and it shows with the A330 having it’s best sales year ever and I expect the A320 will likely also break it’s own sales record.[...] (Chris Wallace)

  …many would debate the “but not recklessly” comment..as you said, selling planes brings in a much needed cash infusion, however many (possibly including you too) know what some of the A330’s have gone for (as well as the A32X and A350’s)…..

  [...]- Airbus aircraft don´t have sixties technology onboard like 737, 757, 747, that influences maintenance costs.[...](keesje)

  …that’s just utter nonsense….the A330/A340 has the same fuselage from a 35 year old model.. The only fact the newer-generation B747 and B737 has is the general shape…there is practically nothing on them which “sixties technology”….The B757 alone has sold >1,000 frames and is no longer in production..so what does that have anything to do with the discussion?

• 16. Dougloid  |  January 8th, 2008 at 2:49 pm

  Don’t feed the trolls, people.

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