Posted on 01/17/2006 12:11:57 PM PST by Turbopilot
European group won 52 per cent of the world market in terms of aircraft in 2005.
Airbus surprised the aircraft industry by claiming it had outsold Boeing last year by winning the most new orders for commercial aircraft despite a record sales drive by its US rival.
The announcement took the aerospace industry by surprise, as Airbus disclosed that it had secured 1,111 gross new orders in 2005 compared with the 1,029 claimed earlier this month by Boeing and said it had booked 38 per cent of the orders in December alone after trailing Boeing for the rest of the year.
Airbus, which is owned 80 per cent by EADS, the Franco-German aerospace and defence group, and 20 per cent by BAE Systems of the UK, defied the forecasts of most analysts to maintain its sales lead for the sixth year in the last seven and propelled the industry to a record year.
According to the European group, Airbus and Boeing combined secured 2,140 gross new orders last year, surpassing the previous industry peak of 1,528 gross orders, for aircraft of 100 seats and above, secured by Boeing, Douglas and Airbus in 1989. (Boeing took over McDonnell Douglas in 1997).
Both Airbus and Boeing, the duopoly producers of large commercial jets, had record years with Airbuss gross new orders tripling from the 370 won in 2004 and was double its previous peak of 556 set in 1998.
The high level of demand last year, which is expected to be the peak of the present ordering cycle, has been fuelled by the launch of key new aircraft, strong demand from low cost carriers, the rapid growth of aviation in Asia in particular in China and India, and also by the high oil price, which is placing an ever greater premium on the fuel efficiency of new aircraft.
Boeing, which had expected to outsell Airbus by the number of units for the first time since 2000, gained large consolation by selling more aircraft by value, as it won the battle for new orders for the most lucrative wide-body long-haul aircraft.
According to Airbus figures the European group won 52 per cent of the world market by units, but Boeing won 55 per of the market by value, as it beat Airbus in a series of key strategic sales campaigns for long-haul jets at leading airlines including Qantas, Cathay Pacific and Emirates and won over some traditional Airbus customers such as Air Canada.
The twin engine Boeing 777 large capacity long-haul jet established a wide lead over the rival four engine Airbus A340 and Boeing also led in the toughly contested segment for long-range, medium capacity 250-300 seat jets, where its 787 Dreamliner, which went on sale at the beginning of 2004, outsold the rival A350, which came to the market a year later. They will enter commercial service in 2008 and 2010 respectively.
Airbus maintained its overall lead by units by winning record orders for its A320 family of narrow body, single aisle jets, which with 918 new orders, many from start-up low cost carriers around the world, accounted for 82.6 per cent of its orders last year.
Boeing sold 569 of the rival 737 family, which accounted for 56.8 per cent of its net orders.
The European group said that it had secured 1,055 net orders last year, after cancellations and conversions, compared to the 1,002 net orders announced by Boeing.
It also delivered more aircraft than Boeing for the third year in succession as its deliveries rose to 378 from 320 in 2004 and beat the previous record of 325 set in 2001.
Boeing production was hampered by a strike late in the year, but the size of the Airbus order backlog, which totalled 2,177 at the end of December, up from 1,500 a year earlier, is expected to maintain its deliveries lead for several more years, as both groups seek to raise production.
Airbus said that its turnover had risen to 22.3 billion in 2005 from 20 billion a year earlier and said that it had achieved an operating profit margin above its target of 10 per cent.
Gustav Humbert, Airbus chief executive, said that 2005 was a record year for the whole industry and for Airbus in particular.
Airlines have never ever placed so many orders, a sign that they are very optimistic about the future of air transportation, with also a lot of new carriers emerging and bringing cheap air travel to an increasing number of consumers. But it also reflects the need for more modern equipment to face the rising fuel prices.
Airbus makes damned fine airplanes...as long as the tail fins stay on.
Like they really have a choice.
Airbus has never made a profit except perhaps once in its history. While its parent, EADS, has made a profit, Airbus has not.
With Airbus an order is everything. Firm order, option, reconfirmable option, MOU (Memorandum of Understanding which simply means a promise to officially order some planes on a later date) and sometimes even canceled orders that have not been officially canceled.
With Boeing, an order is where a deposit has been or will soon be put down on a set number of aircraft.
I agree.
Funny Boeing was well ahead of Airbus all year in firm orders, and stole the spot-light winning nearly all the highly contested orders at Paris and elsewhere...and suddenly Airbus discovers hundreds of orders in January to announce they outsold Boeing for 2005.
I find it this rather suspect.
In any case Boeing is making more money selling the larger jets, even if Airbus sells a larger number of small jets.
The big stories of 2005 are still the 777 killing the A340 in sales and the 787 Dreamliner racking up record orders.
I think Boeing only counts orders where a contract has been signed.
I'd thought the 737 order from China was bigger, but I couldn't find a source to quote so I went with the Boeing number. Your info makes sense.
As far as United goes, I've found it funny that United, which is a spinoff of the same parent company that spun off Boeing, is buying Airbus. It would be kind of like a Ford executive buying a Cadillac.
I think Airbus came up by several hundred airframes by "enticing" (read: giving away airplanes) small/nonexistent startups to take A32x instead of 737 models. It's also entirely possible that the 2.5 week delay on their part was based in part on Airbus waiting to hear the Boeing numbers, and then retroactively signing contracts on whatever terms they could get in order to beat the Boeing numbers. When your development costs are fully covered by taxpayers, you can do a lot more to book business.
So, theoretically, does Airbus. The problem is that with the various levels of agreements, agreements to agree, memoranda of understanding, free commitments, etc., the definition of a contract is almost impossible to pin down, and is almost certainly different between Airbus and Boeing.
Actually, they did, at least 50 of them. However, in a vain effort to gin up some publicity stunt like this, they pulled 150 orders out of 2006 and it has come across looking like a cheap tactic. That taints the so-called record and in any case, everyone acknowledges that Boeing got the best of the order value.
The very different experiences of Lockheed with the L-1011 and Airbus with the A300 and A310 vividly demonstrate the significance on industry outcomes of direct financial support of Airbus. These experiences are described in a recent OTA report in the following way:
"Lockheed was a company with a strong military business and experience producing commercial transports and had learned many of the skills needed to make wide-bodiedFor example, over a billion dollars of loans to develop the A300 and A310 were forgiven the German airbus partner by the German government in 1988.When Lockheed's defense operations were threatened in the late 1960s by its disastrous commercial performance with the L- 1011, the government did approve a small loan guarantee of $250 million to ensure the company's survival as a defense contractor, not as a commercial producer. Lockheed never called upon the guarantee.
See, Office of Technology Assessment, Competing Economies: , p. 90.This includes a substantial amount of unpaid interest on government loans at subsidized rates. Testimony of J. Michael Farren, Undersecretary of Commerce for International Trade, before the Joint Economic Committee, February 27, 1992. According to Boeing officials, total European subsidies of $26 billion amount to $8 million per Airbus sold. 26 aircraft in the military C-5 transport program. Airbus was a newly formed organization drawing on the technical skills of members none of which had previously designed or produced a wide-body transport. Lockheed sold 73 L-1011s during the first year it was offered. The A300 took 7 years to sell that many. During some of this period, Airbus was producing planes for inventory and financing costs. During the first ten years of production, deliveries of the A300 and A310 (a derivative of the A300 requiring additional investment) combined were almost the same as those of the L-1011. The L-1011 lost roughly $4 billion. No one knows what Airbus lost during this period, but it would be reasonable to expect the losses were at least as great as Lockheed's. Even so, Airbus shortly brought out four new models and two derivatives while Lockheed was forced to exit the commercial aircraft business.....The difference between Lockheed's fate and that of Airbus is largely attributable to the direct financial supports the members received from their governments."
Most of this support has come in the form of launch aid or low-interest loans with long repayment periods (Table 5-4).
By the end of 1990, the governments of France, England, and Germany had provided $5.6 billion in launch aid, of which only $500 million had been repaid, and an additional $2.3 billion had been pledged for the future A330-A340 models. A further pledge of $3 billion was made by the Germany government as part of the merger between Daimler and MBB, the German member of the Airbus consortium. These total almost 75% of the development funds used in Airbus models to date.
In principle, the launch aid provided by the European governments is repayable, but only if the products developed with such aid are profitable. The companies that receive the aid are not required to pay back the funds from their other non-Airbus business activities. As a result of this arrangement, government money, not company money, has borne the significant risks of product launch discussed above. Companies have not been bet-- public funds have. Public insurance against company risk has encouraged the Airbus consortium to be aggressive in the launch of new models, to exploit new markets and new technological opportunities. Indeed, as noted below, during the 1980s Airbus was more aggressive in introducing a number of new technologies than either MD and Boeing.
bump
Today's report in the Anti-American "DER SPIEGEL, they report that Boeing has retaken the lead from Airbust.
Boeing has sold one quarter more airplanes than airbust in 2006
http://www.//derspiegel.de
A friend of mine was a pilot for Jet Blue. He told me that Jet Blue was essentially given the jets and that is how they competed with the other airlines.
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