Airbus Residuals Gain From Improving Market Position

Though 2002 proved to be a dismal year for both Airbus and Boeing, the larger net order book secured by Airbus, the greater backlog and the prospect of more deliveries than Boeing in 2003, provides for relative consolidation of existing Airbus residuals. For years Airbus has been in Boeing's shadow. Lower...

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Though 2002 proved to be a dismal year for both Airbus and Boeing, the larger net order book secured by Airbus, the greater backlog and the prospect of more deliveries than Boeing in 2003, provides for relative consolidation of existing Airbus residuals. For years Airbus has been in Boeing's shadow. Lower orders and delivery rates have sometimes, perhaps rightly, contributed to the perception that Airbus products would face tough remarketing down the line. The last five years, since the demise of McDonnell Douglas, has seen more than a steady improvement for Airbus both in terms of orders and delivery rates.

The year 2002 saw both manufacturers record significant cancellations - Airbus 67 and Boeing 75. Airbus failed to register a single order for the A300, A310 or A318. The cancellation of 27 A318 orders represented a blow for Airbus, particularly as Boeing recorded 16 net orders for the B717. The cancellation of nine A321s negated the nine orders recorded. The 217 net orders for the A319/A320 (involving the switching of orders from other models) far surpassed the 119 recorded for B737NG, even though both manufacturers recorded significant orders from UK low cost operators during the year. Surprisingly, Airbus managed to keep pace with Boeing on larger widebodies registering 21 net orders for the A340 compared to 26 orders for the B777. The year end backlog of Airbus at over 1,500 units is nearly 50 percent higher than the 1,100 of Boeing.

While Airbus delivery rates have always failed to match those of Boeing, the year 2003 could see Airbus matching or surpassing deliveries made by Boeing. Boeing has traditionally considered deliveries as the benchmark of success such that a win by Airbus this year would represent a marked reversal of fortunes. In just a decade, Airbus will have moved from a minor annoyance to the dominant player. Airbus expects to deliver some 300 aircraft compared to Boeings 285 though both manufacturers are acutely aware that events in the Middle East could scuttle such projections.