Airbus (NASDAQOTH:EADSY) -- and to a lesser extent, Boeing (NYSE:BA) -- may be preparing to reveal a slew of new aircraft orders at next week's Paris Air Show. However, so far, 2019 has been an extremely quiet year in terms of order activity.
This order slump continued in May. In fact, Airbus and Boeing combined for just one aircraft sale last month, leaving both aircraft manufacturers' net order totals for 2019 in negative territory.
Recent trends continue at Airbus...
Through the first three months of 2019, Airbus reported more cancellations than new orders, primarily due to Etihad Airways' move to restructure its order book and Airbus' decision to start winding down production of the A380 jumbo jet. In April, it sold five widebody jets -- three A350-900s and two A330-800neos -- but those orders were completely offset by the cancellation of an order for five A330-200s.
In May, Airbus received an order for a single A320neo from a private customer. While hardly an impressive showing for the month, at least there were no order cancellations. This brought Airbus' year-to-date order total to negative 57. It has logged more cancellations than new orders during 2019 for each of its five current aircraft families.
... and at Boeing
In contrast to Airbus, Boeing got off to a decent start in 2019, booking 91 net firm orders in the first three months of the year. This included key orders for its 777-9 jet from British Airways and for its 787 Dreamliner family from Lufthansa and Bamboo Airways.
However, it joined Airbus in negative territory in April, as India's Jet Airways -- a key customer for Boeing -- was forced to suspend operations due to mounting financial problems. Boeing had to remove more than 200 orders from its backlog to account for the strong likelihood that Jet Airways ultimately will go out of business.
Boeing booked just one new order (a deal with an undisclosed customer for four Boeing 737 MAX jets) in April and didn't receive a single firm order in May. Meanwhile, there were another six cancellations for Boeing 737 family jets recorded in May. This dropped Boeing further into the red, with negative 125 net orders on a year-to-date basis.
Airbus should get into the black next week -- what about Boeing?
In recent years, Airbus has frequently gotten off to a slow start in terms of orders. However, it has always ended up in good shape by year-end.
The major air shows are typically a key venue for striking deals and announcing new orders. This year, Airbus has a good chance to bring home a big order haul from the Paris Air Show as airlines look to snag delivery slots for the A220 and A320neo families in light of the Boeing 737 MAX's safety and reputational issues. The likely launch of the extended-range A321XLR model could also stimulate new orders. Lastly, widebody order activity appears to be rebounding, and Airbus should be able to win a decent share of that business.
Boeing will have a tougher time capitalizing on the Paris Air Show to reverse its recent order slump. Regulators are in no hurry to recertify the 737 MAX, but the only way for Boeing to put travelers' fears about the plane to rest is to get it back in service with no further incidents. In the meantime, airlines may hesitate to place new 737 MAX orders. The current U.S.-China trade tensions will also likely prevent Boeing from consummating any deals with Chinese airlines.
The key for Boeing will be to get airlines to sign commitments for the 737 MAX that can be publicly announced after the current safety concerns have faded. It also has an opportunity to continue its recent sales momentum for the 777X and 787 widebody aircraft families. That said, Boeing could still leave Paris with more cancellations than firm orders in 2019.