For 2016, Boeing (NYSE:BA) set a goal of achieving a 1:1 book-to-bill ratio for its commercial jet business. That means it hopes to receive one order for every jet it delivers this year.
Nine months into the year, Boeing's chances don't look good. Boeing expects to deliver 740-745 commercial airplanes this year. Meanwhile, as of Tuesday, it had booked 357 net orders in 2016. That puts it less than halfway to its order goal.
Yet while Boeing faces an uphill battle to reach 740 orders, it still has a shot at getting there. Here's what Boeing would need to do to meet its 2016 order target.
Finalize recent sale agreements
First, Boeing has a large number of aircraft commitments that have yet to be finalized into firm orders. For example, at this summer's Farnborough Airshow, Boeing announced 182 orders and commitments, but just a fraction of them were new firm orders.
There are about 100 outstanding commitments from the air show -- mainly for Chinese airlines -- that still aren't reflected in Boeing's 2016 order total. To count those as firm orders, Boeing needs to finalize the sale terms.
Similarly, Boeing's landmark agreement to sell 80 jets to Iran Air hasn't resulted in any firm orders yet. The U.S. government recently approved export licenses for these planes, but Iran still needs to line up financing to close the deal.
Finally, Saudi flag carrier Saudia recently announced plans to buy 28 widebodies from Boeing. Apparently, the deal isn't official yet, as Boeing has not recorded any firm orders from Saudia this year.
All told, Boeing has about 200 of these pending orders. It will be difficult for Boeing to finalize all of them in the next three months. However, if it can, Boeing would be a lot closer to reaching its full-year order target.
Win highly anticipated orders in the Middle East
Boeing could also be close to winning big orders from the two top airlines in the Middle East. Qatar Airways is on the verge of ordering at least 30 more Boeing widebodies -- primarily the 787 Dreamliner -- according to Bloomberg. Enigmatic Qatar Airways CEO Akbar Al Baker has been displeased with Airbus (OTC:EADSY) lately, due to delivery delays, so there is little risk of Boeing losing this order to Airbus.
Meanwhile, Emirates is likely to place an order for about 70 widebodies before the end of the year. It is choosing between Boeing's 787 Dreamliner and Airbus' A350. Given that Emirates canceled a previous order for 70 A350s in 2014, it seems likely that Boeing has the inside track. It's also possible that Emirates would split an order between Boeing and Airbus.
If Boeing wins the Emirates order and can finalize a deal with Qatar Airways this year, it would have another 100 orders in the bag.
Capitalize on the year-end rush
Finally, Boeing needs to take advantage of the typical year-end rush to order airplanes. Last year, Boeing finished Q3 with only 447 net orders. However, it pulled in 321 net orders in Q4 to reach a 1:1 book-to-bill ratio for the year.
Boeing often receives an outsized number of orders in the fourth quarter. To some extent, Boeing may become more aggressive near the end of the year as it tries to meet internal sales targets. Airline planning cycles may also encourage a rush of year-end orders. In 2016, it is more important than ever for Boeing to end the year on a high note.
Boeing still has a chance
Internally, Boeing executives appear to recognize that it will be very challenging to meet a 1:1 book-to-bill ratio this year. Just about everything would have to go right, including firming up the numerous orders that have been announced but not finalized, capturing big widebody orders from Emirates and Qatar Airways, and rounding up more orders in the year-end rush.
In the end, Boeing will probably fall short of its 2016 order target. But investors should still expect to see a big uptick in order activity in the next three months.