In recent years, Airbus (NASDAQOTH:EADSY) has repeatedly surpassed its American counterpart in the annual race to capture the most aircraft orders. However, 2018 increasingly looks like it will be the year that Boeing (NYSE:BA) snaps Airbus' winning streak.
Boeing jumped out to a big lead over Airbus in the first half of the year. And while July was slow in terms of firm orders -- despite a slew of commitments announced that month at the Farnborough Airshow -- Boeing bounced back with a strong August order total. Meanwhile, Airbus' 2018 firm order total continued to languish.
Another big month for Boeing
Boeing booked 99 firm orders during the month of August. As usual, the 737 MAX family drove the bulk of its order activity. Aircraft leasing companies Air Lease and Aviation Capital Group ordered 30 and 20 737 MAXs, respectively, following up on commitments announced at the Farnborough Airshow.
The other nine orders recorded last month were for wide-body aircraft. Boeing's leasing arm took over five 787-9 Dreamliners (previously ordered by Hawaiian Holdings) and ordered one 777 freighter. Additionally, Air Lease finalized an order for three 787-9s that was first revealed at the Farnborough Airshow.
As of the end of July, Boeing had received 487 net firm orders in 2018. Its 99 firm orders for August -- offset by five cancellations -- brought its year-to-date net firm order total to 581. That consists of 424 orders for the 737 family, 14 for the 747 family, 20 for the 767 family, 27 for the 777 family, and 96 for the 787 family.
Airbus' slump continues
While Boeing has enjoyed strong order activity this year, Airbus has struggled to close aircraft deals. It booked 206 net firm orders in the first half of 2018. The European aerospace giant did announce an order for 60 A220s from JetBlue Airways in early July and another 93 firm orders (plus 338 commitments) at the Farnborough Airshow a week later. Yet even the supposedly firm orders weren't quite as solid as it initially seemed.
Indeed, Airbus booked just a single order for eight A350-900s during the month of July. August was even worse. The company received two small orders last month: a deal for three A320s from Lufthansa and an order for two A321neos from Air New Zealand.
This gives Airbus just 219 net firm orders in 2018, leaving it far behind Boeing for the current year. (On the other hand, Airbus' overall backlog is still significantly larger than that of Boeing, due to the former's strong order performance over the past decade.)
Looking at individual aircraft types, the A320 family leads the way for Airbus with 161 net firm orders. Among its wide-body families, Airbus has booked eight net firm orders for the A330 family, 36 net firm orders for the A350 family, and 14 net firm orders for the A380 during 2018.
Is this reversion to the mean -- or a real change?
To some extent, Airbus set itself up for a weak 2018 with an all-out effort to overtake Boeing in the 2017 order race. Airbus booked 776 net firm orders in December 2017 -- a monthly record -- compared with 333 net firm orders in the first 11 months of the year. Clearly, the company had to leave no stone unturned to achieve this incredible result -- but it means there weren't a lot of active deal prospects left by the end of last year.
However, Airbus also faces some more significant challenges, highlighted by the surprising resignation of its sales chief, Eric Schulz, earlier this week. Schulz left after just nine turbulent months on the job.
One major challenge for Airbus is ensuring a reliable supply of aircraft engines. Both engine suppliers for the A320neo family have been struggling to meet their fairly aggressive production targets. Meanwhile, Rolls-Royce (the exclusive engine supplier for the A330neo and A350 families) faces spiraling engine reliability problems. These engine issues could make airlines think twice about ordering Airbus aircraft right now.
Boeing isn't immune from these problems, either. However, it has experienced fewer delivery delays for its 737 MAX -- notwithstanding engine supply issues -- while the majority of its 787s use a General Electric engine rather than the faulty Rolls-Royce model. This suggests that Boeing may be able to continue its relative outperformance in terms of order activity.