Friday, January 04, 2013

Airbus Defends Neo Edge After Boeing Retakes No. 1 Title

Airbus SAS is poised to maintain a lead in sales of new single-aisle jet models even as it relinquishes the title of world’s largest planemaker to Boeing Co. for at least three years.

The upgraded Airbus A320neo probably ended 2012 with a market share of 60 percent or more in orders for the newest narrow-body aircraft, the backbone of global fleets, based on deals announced ahead of full-year figures due on Jan. 17.

Airbus has reported 1,654 firm orders since the A320neo was offered in December 2010, and the Toulouse, France-based company usually discloses more orders when it unveils annual results. Boeing said yesterday that it has 1,064 orders for the 737 Max, a competing jet with new engines that went on sale in late 2011.

“Both Airbus and Boeing are in good shape,” said Thomas Picherit, Paris-based analyst at AlphaValue. “The orders show demand is there to maintain high production rates.”

Shares of Airbus parent European Aeronautic, Defence & Space Co. rose as much as 1.2 percent and were trading 1 percent higher at 30.49 euros as of 10:48 a.m. in Paris.


Dreamliner Boost

 
Holding an advantage in single-aisle planes eases the blow for Airbus with Chicago-based Boeing retaking the No. 1 position in deliveries for the first time since 2002. The U.S. company is poised to retain the top spot for at least two more years, buoyed by rising deliveries of the delayed 787 Dreamliner.

While Airbus wouldn’t comment on 2012 figures ahead of its report, Chief Operating Officer John Leahy has said he expects the A320neo to win 60 percent of orders in the race against the Max. The neo is scheduled to enter service in 2015, about two years before the Boeing model.

The A320 and 737 families are the backbone of Airbus and Boeing production, with more than 800 combined deliveries last year. The rivalry has intensified as the pair’s duopoly is about to be challenged by new entrants from Canada and China.

Boeing’s full-year deliveries totaled 601 jets, it said yesterday, while Airbus handed over 516 planes through November, keeping it on track to reach a full-year goal of at least 580.

Deliveries are important because that’s when planemakers get large payments on the purchase price of a jet. Boeing handed over 46 Dreamliners, beating its goal of as many as 42.

Turkish Deal

Net orders at Boeing climbed 49 percent last year to 1,203, and Airbus has announced 750 sales so far. Its 2011 total was 1,419, bolstered by demand for the A320neo after its debut. Airbus’s recent successes include 75 neos sold last month to Pegasus Airlines, a low-fare Turkish carrier flying 737s.

“We fight hard on all of these campaigns,” Boeing’s marketing chief, Randy Tinseth, said yesterday in an interview. “We do the best we can to make deals that work for our customers and us, and we couldn’t get there on that one.”

While neither company has given 2013 forecasts, production increases announced by Boeing indicate it will build more than 660 aircraft this year, compared with Airbus’s planned output of more than 600.

Boeing is boosting total airliner production more than 60 percent in the four years through 2014 in response to customer demand for more fuel-efficient jets. Howard Rubel, an analyst with Jefferies Group Inc. in New York, said the company is set to stay ahead of its rival in deliveries in both 2013 and 2014.

“After that, it will be whoever has the solution for that mid-range wide-body, which they’re both going at hammer and tong,” Rubel said. Airbus’s new A350, the 787’s competitor, is scheduled to enter service in 2015.

http://www.businessweek.com

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