This Is How Airbus Beat Boeing in 2013

As the final minutes tick down toward the end of 2013, it's becoming clear: Boeing (NYSE: BA  ) is so far behind Airbus (NASDAQOTH: EADSY  ) in the race to sell planes this year... that there's just about no way Boeing can catch up.

Now how did that happen?

After all, just one year ago, Boeing absolutely crushed Airbus in a similar race to win sales. After subtracting out cancellations, Boeing booked orders for a net 1,203 airplanes of various shapes and sizes in 2012. That was 370 planes more than Airbus sold -- a margin of victory 44 percentage points wide.

But fast-forward 12 months, and here's how the numbers stand in these final days of 2013:

 

Boeing

Airbus

Gross plane orders in 2013 ...

1,247

1,373

Minus customer cancellations ...

161

59

Equals net orders for the year:

1,072

1,314

Sources: Airbus, Boeing

That Boeing and Airbus should switch positions from winner to loser, and vice versa, so quickly is nothing short of astounding. And yet, if you dig deeper into the numbers, you can see how it happened.

Historically, Boeing's biggest moneymaker has been its 737 single-aisle regional jet -- its self-proclaimed "best-selling commercial aircraft in aviation history." With more than 11,500 orders placed since inception, and a backlog of 3,400 orders yet to be filled, this franchise looked unassailable. But in 2013, as Boeing focused on making up lost time from production delays at its 787 widebody program, Airbus found an opening to make inroads in the regional jet market.

You can see the results below, for Boeing...

Boeing 

Single-aisle 737s

Widebody 777s and 787s

2013 Gross Orders

958

279

Cancellations

-161

-9

2013 Net Orders

797

270

Source: Boeing

And for Airbus...

Airbus 

Single-aisle A319s, A320s, and A321s

Widebody A330s and A350s

2013 Gross Orders

1089

284

Cancellations

-44

-12

2013 Net Orders

1045

272

Source: Airbus

What we've done here is set orders for Boeing 747 jets and Airbus 380s to the side, and just focused on the two businesses in their roughly comparable "halves" -- single aisles and wide-bodies. This makes it a bit easier to see what happened this year.

In a nutshell: Boeing and Airbus ran a dead heat on wide-bodies, but Airbus ran away with the race in single aisles. Across the two plane makers' combined fleets, Airbus sold 22.5% more planes than Boeing; but in single aisles, that margin of victory widened past 31%, with Airbus selling 248 more A319s, A320s, and A321s than Boeing sold 737s.

Foolish takeaway
And the good news for Boeing shareholders? In order for Boeing to recapture the sales lead from Airbus in 2014, all it really needs to do is sell more units of its already best-selling, lowest-price, most-profitable airplane. Gee -- twist their arm, why don't you?


Boeing's 737. Time for sales of this bird to go up, up, and away. Source: Boeing

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.


Read/Post Comments (10) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 15, 2013, at 3:34 PM, sccannon wrote:

    I think the boom in Airplane sales is for two reasons. Airlines are charging more as competition has merged and died off. Secondly credit money must be more available than it use to be. Credit has more to do with selling planes than any so called advances in plane technology. The countries that are backing Airbus loans must be giving very good deals.

  • Report this Comment On December 15, 2013, at 3:56 PM, jackgxx wrote:

    Boeings backlog of 737 orders is the envy of any business, yet it's also getting to be a real problem, as they are vulnerable to alternatives that may be technically adequate, but certainly a financially sufficient solution for carriers.

    There was rumor about additional 737 manufacturing capacity, but Dreamliner problems seemed to be sapping the companys attention and financial resources

  • Report this Comment On December 15, 2013, at 6:40 PM, zzyster wrote:

    The use of the tragic Asiana crash photo as emblematic of Boeing's 2013 performance is really in poor taste and needlessly thoughtless and insensitive towards those who suffered the worst personal loss.

  • Report this Comment On December 15, 2013, at 11:31 PM, WingWise wrote:

    I see zzyster already beat me to it, but when I see this article and the completely unrelated photo of the Asian crash, I must say I am very disappointed in your choice of illustrations. It is unrelated, irrelevant and very insensitive.

  • Report this Comment On December 16, 2013, at 1:56 AM, PeakOilBill wrote:

    Crashed plane photo = in poor taste.

  • Report this Comment On December 16, 2013, at 3:51 AM, RIATdog wrote:

    Comparing sales between Airbus & Boeing over such a short period is quite pointless. Why not go back to 2011 when Airbus "trounced" Boeing.

    In fact 2011 and 2012 were the real yo-yo years - Airbus had mega sales with the newly-launched A320neo in 2011, while Boeing fought back in 2012 with the 737MAX.

    What is a little surprising is that Airbus has beaten Boeing despite Boeing launching two new models this year - 787-10 and 777X.

    @jackgxx "Boeings backlog of 737 orders is the envy of any business"

    Boeing is in a duopoly and has the smaller backlog of single-aisle planes. Any envy of Boeing's backlog is misplaced.

  • Report this Comment On December 16, 2013, at 8:14 AM, Helivette wrote:

    There must be a bit of subsidy in the cost for airbus .

    Multiple country locations factories helps with tax breaks .

    I doubt many are adding to their fleet , more like replacing tired older airframes . Better fuel efficiency engines ,, safety systems ,, navigation displays ,,, air filtration and cooling drive the sales of the modern airbus .

  • Report this Comment On December 16, 2013, at 2:51 PM, HBarron wrote:

    Airbus continues to beat Boeing in the single aisle category. 60/40. Boeing has a lot of work to do.

    Each plane for Boeing makes 2x the average profit that Airbus makes. This is mainly due to the 77W.

    The one thing to keep in mind with these tallies is the full 777x has not yet hit Boeings order book. That is for 175 planes.

    Moral of the story, Airbus is winning the narrow body, Boeing is winning the widebody, Boeing makes more profit per plane than Airbus.

  • Report this Comment On December 16, 2013, at 3:20 PM, headhuntertim wrote:

    This is a bogus comparison. Wait until the end of the year and find out their respective profit numbers are. After all, isn't the bottom line always the bottom line?

  • Report this Comment On December 16, 2013, at 5:09 PM, TMFDitty wrote:

    HBarron -- that's my read on it, yes. Although now that I think of it, there may be a corollary here that could be good for Boeing. What if, seeing how long its 737 backlog line has become (and being on record wanting to reduce that backlog), Boeing is insisting on higher prices on 737s for new sales?

    Were that the case, it could boost profit margins, without greatly endangering sales figures in the near term (since it has years' worth of 737s left to build in any case). That would tend to result in more Airbus wins, albeit at lower profit margins (which we're also seeing).

    I don't know that this is what's going on, but it would fit the facts.

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