As 2013 Ticks Down, Can Boeing Beat the Buzzer -- and Airbus?

Every year, around this time of year, an argument breaks out between Boeing (NYSE: BA  ) backers and adherents of Airbus (NASDAQOTH: EADSY  ) , its European archrival. The issue: Who's the bigger airplane builder?

This year, the answer seems obvious.


Boeing's 787 Dreamliner -- flying away with the win? Source: Boeing

Boeing wins!
With $85.1 billion in trailing revenues to Airbus's $81.2 billion, Boeing, of course, is the bigger airplane builder. Boeing has a bigger commercial plane business, too, with $49.1 billion in revenues in its last fiscal year versus $48.7 billion at Airbus. For that matter, the $2.8 billion that Airbus Military collected last year -- even if paired with the $8.2 billion at Eurocopter -- still isn't a patch on the $16.4 billion raked in at Boeing's Military Aircraft division.

Profits-wise, too, Boeing is clearly the leader. Trailing 12-month operating profits margins are 7.6% at Boeing -- superior to the 4.4% operating margin at Airbus. As a result, over the past 12 months, Boeing has earned $4.3 billion from its aerospace business. And EADS?

Just $2.1 billion.

But in one important respect, the debate rages on: Forget about the past -- who's going to be the biggest airplane builder in the future? And that is where the race to win airplane orders comes in.


Airbus orders fly to the rescue. Source: Airbus

Or does it?
It's also where, finally, Airbus aficionados have their day. Because, as of this week, and based on Boeing's most up-to-date tally of airplanes sold, it looks like Airbus is about to claim the 2013 crown as "world's best airplane salesman." Here's how the race stands as the clock ticks down to the final days of 2013:

 

Boeing

Airbus

Gross plane orders in 2013 ...

1,247

1,373

Minus customer cancellations ...

175

59

Equals net orders for the year:

1,072

1,314

Source: Boeing, Airbus

With just two weeks left in the airplane-selling season, Airbus leads Boeing on all counts:

  • Most gross plane orders: 10% more orders taken in
  • Best customer loyalty: 63% fewer cancellations
  • Best sales record: 22.5% more planes sold in the year

Can Boeing catch up by year end? I honestly doubt it. The company did just record 61 new orders for its 737 MAX jetliner from Air Canada this week. Management seemed to think it would be able to get those planes into the order book pretty quickly -- but didn't quite make the cut in time for Thursday's order-book update.

Boeing also landed 259 "orders and commitments" (to order) its new 777X airliner at last month's Dubai Airshow. Combined, the MAXes and the 777Xes could conceivably add up to enough new business to put Boeing back in the lead by year end. However, few, if any, of the 777X orders have found their way onto Boeing's books as actual firm orders since being announced nearly a month ago.

Conclusion: In this one respect, at least, it looks like the race is Airbus's to lose. Barring a last minute surge, Airbus will reclaim from Boeing the crown it lost in 2012.

Heads, you win. Tails, you don't lose
So Boeing sold the most planes last year? And Airbus sold more planes this year? Well, as long as they take turns like that, both companies should serve their shareholders admirably... forever! As world-famous investor Warren Buffett tells us, there's no need to go searching for long shots. Pick your best ideas, bet on them big, and ride them to riches -- let other folks worry about the bobbles in the market. That's why our own CEO, nearly as-legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover three companies we love the most. 


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  • Report this Comment On December 14, 2013, at 4:20 PM, rotorhead1871 wrote:

    the real crown is deliveries,,,which Boeing clearly leads in and will continue doing for the future as AB cannot increase production...as it is a stabilized euro jobs program first...and an aircraft builder second. AB is tapped out at a 9 year backlog, Boeing is aggressively working its backlog down to the optimum 3-5 year. AB is a government JOBS PROGRAM......that happens to build airplanes..BOEING is the builder of the greatest airframes in the WORLD---first and foremost....it employs a workforce to support this prime directive...

    why dont you run a story on deliveries????

  • Report this Comment On December 15, 2013, at 2:44 PM, vito98103 wrote:

    You are missing the point -

    The point of running a business is to make a profit -

    selling things just to run the numbers up is silly.

    Airbus doesn't have to make a profit and Boeing does.

    So your article is meaningless - have you run out of other story ideas?

  • Report this Comment On December 16, 2013, at 4:26 AM, RIATdog wrote:

    @rotorhead1871 - "which Boeing clearly leads in and will continue doing for the future as AB cannot increase production..."

    Which doesn't quite explain how Airbus outdelivered Boeing for the last 10 years and how their deliveries are increasing year-on-year. Check the numbers.

    @vito98103 - "Airbus doesn't have to make a profit"

    Ask their shareholders if they have to make a profit. If you checked their financials, you'd notice they do make a profit.

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