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Boeing Beats Airbus (With a Stick) as 2016 Gets Underway

By Rich Smith - Feb 17, 2016 at 9:12PM

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Will 2016 be Boeing's year to (finally) shine?

Another year, another horse race -- and this time it looks like Boeing (BA 1.26%) has a fighting chance to finally beat Airbus (EADSY 0.90%).


2015 was the year of "Airbus uber alles." Image source: Airbus.

Last year, as you may recall, Airbus notched its third straight victory in the race to sell the most planes in a calendar year. Beating Boeing with a thumping 1,139 gross orders booked (versus Boeing's 878), Airbus easily won this race in 2015. But as 2016 kicks off, Boeing is kicking Airbus squarely in the tail fins.

As I noted earlier this month, Boeing sold no fewer than 47 airplanes to its customers in the month of January. Those planes included a 787, six 777s, and forty 737s. How did that compare to Airbus? For reasons the company didn't bother to explain, Airbus held back its own January totals for most of the month of February -- but the numbers finally did come out this week: In the entire month of January, Airbus took in only 16 orders for new aircraft -- barely a third of Boeing's tally.

The rundown
What's really interesting, though, is what kinds of airplanes Airbus has been selling. Boeing, you see, relied mainly on sales of small, relatively cheap, single-aisle 737s to drive its success last month, with the addition of a handful of larger 777 liners and a single 787 to leaven the revenue cake.

Airbus, too, sold a couple of small planes -- two A320ceo aircraft ordered by China Aircraft Leasing Group Holdings Limited. But Airbus' big success was the sale of 14 big A330-900 airliners to an "unidentified customer."

What it means to investors
Why is this important to Airbus? In a word: money.

Each of the 14 A330-900s sold last month could bring in as much as $287.7 million in revenue for the European plane maker, based on published list prices. In contrast, the average 737 MAX 8, the most popular Boeing variant of that smaller bird, lists at just $110 million.

Result: Boeing's sales of 40 single-aisle 737s last month could (theoretically) generate as much as $4.4 billion in revenues before discounts. But by selling just one-third as many larger A330s, Airbus will bring in nearly as much cash -- $4 billion. In short, despite selling far fewer planes than its rival, Airbus remains in the race with its rival from a revenue perspective.

And one final note before we part for the day: Each of the A330-900s that Airbus sold last month were of the "neo" variety. That means they are equipped with the "new engine option," such that each sports a pair of shiny new Rolls-Royce (RYCEY 1.40%) Trent 7000 engines.

Rolls-Royce, as you may recall, has been struggling to sell its engines lately, as rival wares from United Technologies and CFM carve up much of the market between them. Last month's sales success at Airbus, though, helps to throw Rolls-Royce a lifeline. As good as the news of the plane sale was for Airbus last month, it may be even better news for Rolls-Royce.


Boeing's 737 is selling fine, but it'll need to sell a lot of them to keep pace with Airbus' A330 revenues. Image source: Boeing.

Rich Smith does not own shares of, nor is he short, any company named above. You can find him on Motley Fool CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 256 out of more than 75,000 rated members.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$169.99 (1.26%) $2.11
Airbus Stock Quote
Airbus
EADSY
$27.94 (0.90%) $0.25
Rolls-Royce Holdings plc Stock Quote
Rolls-Royce Holdings plc
RYCEY
$1.08 (1.40%) $0.01

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