Over the weekend, we took a quick stroll through Airbus' latest report on plane sales set up through the end of November. The upshot: Airbus not only maintained its October lead over Boeing, but expanded it, to 77% more net orders booked through the end of November.
As things stand today, Airbus has booked 1,079 gross orders for its aircraft through the end of November. It's suffered 72 total cancellations. Thus, Airbus' net tally of orders booked year to date stands at 1,007 planes.
But what about Boeing?
Speaking of Boeing, this is a story about Boeing...
In contrast to Airbus, which only updates order tallies monthly, Boeing keeps its investors better informed with weekly updates. The latest of these came out on Thursday, and in it, Boeing confirmed it has received new orders for 10 single-aisle 737s from Turkish Airlines, as well as an order from FedEx (NYSE:FDX) for yet another Boeing 767 freighter.
FedEx, as you may recall, has been growing its capital spending budget, with fiscal year 2016 capex of $1.6 billion expected to come in at nearly three times 2013 levels before dropping back down again in 2017. Boeing, for its part, is happy to take FedEx's money, and at published plane prices, that new 767 will mean more than $199 million in new revenue for Boeing -- or roughly twice the price of one of Turkish Airlines' shiny new 737s.
The year to-date
Counting this new batch of orders, here's how Boeing's order book looks today:
- 456 gross orders for single-aisle 737s
- 97 Dreamliner 787s
- 58 widebody 777s
- 49 Boeing 767s
- Six 747s
That works out to 666 gross orders for Boeing planes -- an ill-omened number. So perhaps it's "good" news for Boeing that, thanks to 91 cancellations received so far this year, the company's net tally is a now less ominous number: 575 plane orders received through early December.
The bad news, of course, is that as of this writing, Boeing has sold barely half as many planes as Airbus has. With just three more weeks remaining in 2015, the chances of Boeing catching up to Airbus look vanishingly slim. Beating Airbus at this point would require Boeing to notch 432 more plane orders before the calendar flips over to 2016 -- 12 dozen sales per week. (And even then, Boeing would need to pitch a shutout, denying Airbus any sales wins whatsoever for the rest of the year).
The more things stay the same, the more they change
In short, after beating Boeing in airplane orders in 2013, then again in 2014, Airbus looks set to win the triple crown -- three straight years of airplane sales supremacy.
And here's another little-noticed fact that may have escaped your attention: As a direct result of Boeing's failure to keep pace with Airbus in collecting new orders, Boeing's backlog of plane orders has begun to shrink. Boeing began 2015 with a backlog of 5,789 airplanes. By the year's three-quarter mark in September, that backlog had shrunk to 5,710 airplanes. Today it stands at 5,648 planes.
In contrast, Airbus' backlog now stands at what it calls an "industry record" of 6,837 aircraft. In the entire history of the world, no one has ever had a backlog this big. Now, whether that's good news or bad news for profit margins at Airbus (and at Boeing) remains to be seen. A shrinking backlog number could be a sign that Boeing is holding the line on pricing, sacrificing sales in an effort to preserve profit margins -- or it could be a precursor to a margin-sacrificing sales push, as Boeing moves to recapture lost market share. Either way, this is definitely a dynamic we'll be monitoring closely.
As Boeing begins to shrink but Airbus continues to expand, this story is entering an entirely new chapter, and one that will be fascinating to watch.