Last week's Paris Air Show highlighted how boom times have returned in the global aerospace industry. Boeing (BA 0.25%) and Airbus (EADSY 0.89%) each finalized hundreds of orders for new jets at the industry's marquee event of 2023. This marked a sharp shift in the environment compared to just a year or two ago.
However, one thing hasn't changed. Airbus continues to fly circles around Boeing, capitalizing on the popularity of its A320neo-family jets to capture far more orders than its American rival.
Boeing finalizes one major order
As expected, Air India firmed up a massive aircraft order (first announced back in February) during the Paris Air Show as it tries to regain relevance after being privatized last year. Boeing booked 220 firm orders: 190 for the 737 MAX, along with 20 for the 787 Dreamliner and 10 for the 777X. Air India also received options for an additional 50 737 MAX jets and 20 787s.
Boeing and Air India finalized a major aircraft order last week. Image source: Boeing.
Unfortunately, Boeing didn't book many other big orders. The aircraft manufacturer did secure an order for 40 737 MAXs from aircraft leasing company Avolon. It also reported five small-scale orders covering a total of 16 737 MAXs and 10 787s.
These deals brought Boeing's total order haul for the week to 286 commercial jets, consisting of 246 narrow-bodies (i.e., 737 MAXs) and 40 wide-bodies (30 787s and 10 777Xs).
Airbus makes a huge splash
While Air India placed a sizable order with Boeing, it finalized an even bigger order with Airbus during the Paris Air Show. It ordered 250 Airbus jets: 210 from the A320neo family along with 40 A350s.
Yet even that order was small potatoes for Airbus last week. A day before announcing the Air India sale, Airbus signed a deal to sell 500 A320neo-family aircraft to top Indian airline IndiGo. Airbus also captured several smaller firm orders for a total of 30 A320neos, 12 A350s, and nine A220s.
These deals gave Airbus 801 firm orders for the week: 740 for the A320neo family, nine for the smaller A220, and 52 for the A350 wide-body family. Notably, in addition to dramatically expanding its narrow-body backlog advantage -- which was already substantial -- Airbus received more wide-body firm orders than Boeing last week. It also signed a non-binding memorandum of understanding for 20 A330neo wide-bodies with Avolon.
A big red flag
To some extent, the gap in order activity between Boeing and Airbus last week may reflect differences in order timing. Boeing booked more orders than Airbus in the first five months of the year, and management expects to finalize some sizable orders in the second half of 2023. Furthermore, Boeing is essentially sold out of delivery slots until 2028, giving it plenty of time to line up new orders.
That said, following its massive order haul last week, Airbus now has a commanding lead in year-to-date orders. Boeing has virtually no chance of catching up by year-end.
Moreover, Airbus already had a dominant share of the duopoly's order backlog for narrow-bodies: the largest and fastest-growing segment of the market. The European aerospace giant now has over 7,000 unfilled narrow-body orders, compared to fewer than 4,500 for Boeing. That will support Airbus' plans to ramp up production aggressively over the next several years.
Airbus' big win at the Paris Air Show also reiterated the company's advantage over Boeing in India and China: the two most important growth markets for commercial aviation. IndiGo, which operates an all-Airbus fleet, holds a commanding 56% share of India's domestic market. Many of its competitors that have ordered Boeing jets have struggled to compete effectively and may never take delivery of those aircraft. Meanwhile, geopolitical tensions between the U.S. and China have given Airbus a big advantage in the latter market.
In the near term, Boeing's biggest challenge is ramping up production following a slew of miscues in recent years. But once Airbus and Boeing meet the current burst of pent-up demand, Boeing will face an uphill battle to maintain its market share. Between its inferior narrow-body product lineup and Airbus' entrenched advantage in China and India, Boeing could be in for another reckoning by the early 2030s.
