Leeham News and Analysis
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Leeham News and Analysis
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Airbus wraps up Paris Air Show 2015
June 18, 2015, c. Leeham Co: Airbus traditionally wraps up the Paris Airshow with a Thursday review of their orders during the week. We have the major events captured in pictures, describing what was announced during the week. Boeing does not end the air show with a similar event.
Airbus President and CEO, Fabrice Brégier, opened the wrap up by saying that he was perhaps a little to conservative in the first briefing Monday where he said that he expected Airbus to book “a couple of hundred orders” during the show. In the end it became 421 orders/commitments, the fourth best result during air shows in Airbus history.
The picture shows the division of the orders between Airbus models.
Brégier used the continued high order rate for Airbus to underline that he did not believe the strong sales of airliners is because a bubble is pumped up. There is a solid market behind all these orders and it confirms the updated global market forecast that Airbus presented on the shows first day, said Brégier.
Demand for civil aircraft continues to be high and Airbus sees a market over the next 20 years of 33,000 aircraft. The majority of these will be single aisle which is also where the margin is going forward. The more profitable twin-aisle are simply outnumbered by single aisles.
The continued success for Airbus in single aisles has now convinced Airbus that it will increase their market share from 50:50 with Boeing for A320 vs. 737NG to 60:40 in Airbus’ favor for A320neo vs. 737 MAX.
This is a result of the strong A320 line, where especially the high-end A321neo is increasing sales. The show’s largest order for Airbus was from Wizz Air, which gave a commitment for 110 239 seat A321neo with a further 90 purchase rights.
This order also brought the backlog of A320neo orders over the 4,000 mark.
Other significant orders for A320 were from Korean Air, 30 A321neo.
Synergy’s leasing arm buying 62 A320neo. 
There were also other A320neo orders, one of 60 units from an undisclosed Asian customer. Airbus also announced that it has launched a freighter conversion program for older A320 with ST Aero.
Widebodies
Airbus has finally got the A330-300 regional version going. Saudi has ordered 20 together with 30 A320ceos.
Garuda also has signed an MOU to buy 30 A350-900s.
The only Airbus model which was not ordered during the show was A380. Airbus said that it has several campaigns on-going and Airbus COO Customers, John Leahy, was confident that he will sell more A380s during 2015.
Well now that your so proud of your real order backlog,perhaps its time to remove some imaginary ones..
Do you think its about time to remove your 82 plane Kingfisher order..
Cmon airbus…Let them go !!!
I think it is normal to have undisclosed orders in your backlog. However those 500 MAX seems a bit too much, many 2-3 yrs old. Maybe McNerney can put the spotslights on them during the next Quarterly Results meeting. As well as actual sales prices/ margins on the MAX lately. Not 5 years later, like happened on the 787. That would be helpful for stockholders and honest.
Uhmm, Just Boeing. I wonder how much Wizzair was able to get those A321 for (the most expensive jet of the single aisle one at that. I don’t think is just Boeing doing the discount here. Viva Aerobus Boss said once (if I remember correctly) “Airbus came in at the last minutes with a real good offer to beat Boeing.
I think the A321 has the price that one could expect of the most popular product, without serious competition, best capabilities and sold out for many years.
Sold out, and yet Wizzair is said to be getting some of those A321NEO in 2019, barely two years after the plane is supposed to come into service. How many of the A320 family produced in 2019 will be A321, yet Wizzair gets to have some of those when there is about a 1000 of them on order?
Often the deal is already fixed, i.e. Whiz air had committed and got the slots way early.
787 had some interesting slots open that were not obvious, as I recall N.W. had early slots but were way down the road to the order announcement (said slots now shucked down the road and should be removed from the books as Delta does not look to every use them).
Does Airbus restrict the definition of a VLA to the A380? And didn’t JL say same thing about A380 orders last time?
Also I believe there was one other attempt at an A320 freighter that fell apart.
Nice numbers for Airbus but as they can only make 50 a month………
I believe Airbus classifies VLA as over/about 400 (ie including the 777-W as well as a prospective 350-11). If so would account for the count discrepancy between it an Boeing – who only seem to count its 787-I and the 380 in this category.
I don’t believe this is in fact true. Do they really want to keep the A380 at 25/yr totaling 500 over 20 years? and do they really think it can outsell the smaller 777X to gain the majority of those 1600 sales?
Both manufacturers fit their numbers for their belief and philosophy, hoping the market will follow. Boeing bet is on the 787 while airbus was on A380.
Either OEM’s GMFs or CMOs, but also WACFs or CGMFs, are strategy tools of a nombrilistic nature, applied INTERNALLY as background material whenever Airbus or Boeing Management need something from their governance (Shareholders/Investors). A detailed analysis of the contents therein allows external observers to predict WHAT exactly Airbus (resp. Boeing) executives are going to ask the respective Supervisory Boards to authorise at the next Board Meeting … Boeing apparently are not going to ask for any green light to launch a 747 replacement, or their forecasts would look differently.
Airbus on the other hand clearly aim to justify a near-term move to strengthen their portfolio offerings in the VLA category, with a market of 1,550 units in the next 20 years, which more than justifies not only the continued investment in support of the expanded A38X Series family venture, but also calls for a second effort in the direction of some other (unnamed) VLA venture … my eyes would turn towards an UltraFreighter as the logical focus, because + 700 A38X Series is already a clear success story, and yet another 850 A350XUF would certainly suffice for a second stand-alone VLA freighter venture.
To summarize : messages McNerney (resp Brégier) is sending home
Boeing : market = BAU, let’s focus on building what we have sold !
Airbus : many new market opportunities out there, let’s go for them !
“Boeing bet is on the 787 while airbus was on A380.”
Airbus has the A350XWB to compete against the 787 and 777. It also dominates the VLA market with the 747-8I more or less dead.
Airbus has the A330NEO. The A350-800 is not very popular and will be discontinued as soon as possible so the A350 is not a “real” competitor to the 787 anymore.
@Jacques Xing
The 787-8 is also not so popular any more. The Problem for the 787 is the trend to upsize. Today Boeing has a backlog twice as large for the 787-9 than for the 787-8.
The 787-9 is not much smaller than the A350-900 or the A330-900.
The A330-800 was a solution to skip the A350-800 and still satisfy some costumers needs.
@Jacques Xing you said: “The A350-800 is not very popular and will be discontinued as soon as possible so the A350 is not a “real” competitor to the 787 anymore.”
Interesting that Emirates are now looking at both the 787-10 and A350-900, so at the least the stretched 787-10 is probably now a350-900’s closest competitor.
Yes, Transworld : the other attempt (AFC/Irkut/UAC) died in 2011 … it was killed by the waves caused in the feeder freighter segment by this quirk :
http://twinaislefeeders.wix.com/quickrotation#!new-strategy-f2xqr
Andreas Hermann is the Freighter aircraft salesman of Airbus but his efforts are at no avail as his mouth is gogged and his arms are tied : he has got nothing to sell ! There is no such thing @ Airbus you could call “freighter Strategy” … the whole freighter affair is dissolved in the inability Airbus puts on display to muster sufficient industrial power giving their sales champions all the wings their triomphal sales scoring are desperately calling for. Chinese industrial seconding is wanted !
Frequent Traveller? Your handle should be Frequent [edited as violation of Reader Comment rules].
Airbus has always considered the 747 and A380 the VLA’s.
Squeezing 405 people in a slightly stretched twin and claiming its a VLA really wasn’t their contribution to the definition.
I guess both sides didn’t expect the 747 going belly up so easily and that is influencing numbers.
747 is still putting along, freighter orders mostly.
Well the 747 is outselling the 380 24-0 this year so maybe it’s a little early to shovel dirt on it…
You may know that Airbus has a famous 5th quarter.
Today we still have the 2nd quarter and Dubai Air Show is at the end of the year.
RENTON, Wash., Oct. 2, 2014 /PRNewswire/ — Boeing (NYSE: BA) announced today that it will increase production on the 737 program to 52 airplanes per month in 2018 in response to strong market demand from customers worldwide. Once the increase is implemented, the 737 program is expected to build more than 620 airplanes per year, the highest rate ever for the world’s best-selling commercial airplane.
At 60:40, Airbus would have to produce 85/mo through the 11 month production year. That is a tall order in 2018, but in ten years, why not.
Or to look at it another way … the 737MAX backlog is about 5 years (3000 units at 600/year) as opposed to 8 years for the A320NEO (4000 units at 500/year).
I think Airbus has pretty well matched Boeing on production and will continue to do so.
the match does get strange if you have the 60/40 sales split but can’t make them fast enough to have that in reality.
Long game of course if the 737 is not competitive then that comes into play when you can get the more efficient aircraft.
For me, it seems that Boeing has an “overcapacity” while Airbus had an “undercapacity”
The Renton facility has 3 lines with a capacity of 21 units/month each (one unit per working day) for a total capacity of 63 units/month. It is dubious that Boeing will reach a so large production rate for the 737 except if Boeing is ready to consume its backlog.
Airbus, on the other hand, has a capacity of 54 units/month which is probably barely enough to sustain their market share. Of course, it is possible for Airbus to increase its production rate by implementing change but these numbers show the disparity between Airbus and Boeing.
I think both companies are deadly serious about consuming their backlogs. It brings in much needed revenue (to develop a MOM aircraft?) and it makes for an easier sale for new craft when you can deliver a year or two sooner than they otherwise would.
Of course they are betting that there will be no “black swan” events and demand will keep roaring along but I believe they believe it’s worth the risk. In 2-3 years we could see over 1400 single aisle aircraft being pumped out yearly. Amazing.
I think Airbus is aiming at 660-720 A320s a year.
http://www.flightglobal.com/news/articles/monthly-a320-output-could-reach-60-from-2018-412833/
Agreed, Airbus will match Boeing and so far from what I remember the actual numbers were with 5 of each other for last year.
It is well reported that Airbus has
1 FAL in Mobile, Alabama with a designed capacity of 8 units/month
1 FAL in Tianjin, China with a designed capacity of 8 units/month
2 FAL in Toulouse, France with a designed capacity of 7 units/month each
3 FAL in Germany with a designed capacity of 8 units/month each
That is a total of 54 units/month or 648 units/year.
Keesje, Keesje, Keesje! Only 11 production months per year at Airbus, so 60/month equates to 660/year. Or is that what you meant by “660-720”?
thysi thysi, pls read the news, Leahy is pushing 63/ month already. Maybe Tianjin, Hamburg & Alabama don’t do french holidays? They did 493 in 2014, while the official monthly rate was 42. Miracle. These are not wide bodies.
http://www.airbus.com/presscentre/pressreleases/press-release-detail/detail/airbus-to-raise-a320-family-production-to-46-a-month-by-q2-2016/
I am not sure but I think that the “French holidays” is the reason why the “effective” production rate is 7 units/month per FAL in France instead of 8.
I think Boeing has a pretty good idea how many -1000 conversions are still hidden in the XWB backlog.
In the 300-350 seats 7000-8000NM segment, the A350-900 and -1000 have to be competed with a combination of 787-10 and 777-8’s it seems.
I won’t come up with cargo included ranges, empty weights and commonality, but you get the picture.
http://www.airbus.com/presscentre/pressreleases/press-release-detail/detail/singapore-airlines-finalises-order-for-up-to-50-more-a350-xwbs/
Can anybody remind me what are the weaknesses of the A350-1000 again? Need some time?
Undersize wing and fan area. 🙂
Good ratio of large floor area to light empty weight is always a winning ticket. -1000 production will be more than combined 787-10 and 777x production I would guess.
Undersize wing? Wingloading seems below 787-10, 777-300ER & 777-9..
Undersize fan area? Maybe. The XWB seemed the right balance between weight, drag and sfc at this stage. I guess there will be bigger engines in 10-15 yrs.
http://im.ft-static.com/content/images/afcd01df-ab3e-4488-b06f-ea4dd20a671d.img
What I tried to say the critics the A350-1000 got over the last 8 years, often seemed more emotional then rational to me.
In rough terms, the MTOW is proportional to the square of wingspan.
36m – 90t
52m – 188t
65m – 293t A350
72m – 360t 777-9
80m – 444t
The A380 needs a 90m wing.
“I think Boeing has a pretty good idea how many -1000 conversions are still hidden in the xwb backlog”
Correct, they do and aren’t too concerned. As of late there hasn’t been a lot of news regarding orders concerning the A35J but top ups have been popping up here and there with the 77W and the 777-8/9. When is the ramp up supposed to happen for the xwb program?
“I think Boeing has a pretty good idea how many -1000 conversions are still hidden in the xwb backlog”
Correct, they do and aren’t too concerned. As of late there hasn’t been a lot of news regarding orders concerning the A35J ”
Rotate, contradictio in terminis 😉
I think Boeing was concerned enough to cough up $10 billion for the 777X and start a create 350-1000 doubts campaign..
Rightfully so, and probably a bit late, looking at the top 20 777 customer’s A350 orders.
However more then a the 787 is smaller so better and 777X is bigger so better I haven’t heard so far from Seattle.. 😀