It Wasn't a Blowout, But Airbus Beat Boeing

Posted by: Carol Matlack on June 19

Even if the Boeing guys shrugged it off, you have to admit Airbus pulled off quite a feat by logging 112 aircraft orders worth $11.8 billion, during the most-downbeat Paris Air Show in many years. On June 18, Airbus snagged a deal for 50 of its A320 narrowbody planes, worth $3.8 billion, from Hungarian discount carrier Wizz Air.

A Hungarian discount airline? Don’t snicker. Wizz, founded by a former CEO of Hungarian flag carrier Malev, is thriving by attracting budget-conscious travelers during the economic crisis. Its traffic was up 30% from January through May. It already has an all-Airbus fleet, so buying from the same source makes sense – especially now, when Airbus is doubtless offering great deals to win scarce orders.

In fact, many of Airbus’s sales this week were to ambitious discount or regional airlines looking to take advantage of a buyer’s market to build their fleets. Others included Malaysian carrier Air Asia, which ordered 10 of Airbus’s new A350 widebody jets, and Cebu Pacific of the Philippines, which is taking at least 15 narrowbody planes. “There are some rays of sunshine in the market, especially in the low-cost sector,” Airbus CEO Tom Enders said at a signing ceremony for the Air Asia deal.

Boeing sought to downplay competition for orders at the show – probably just as well, since it booked only two, a pair of 737 narrowbodies sold to Japanese leasing group MC Aviation Partners. Scott Carson, Boeing’s commercial aircraft chief, told reporters that the company had decided several years ago to disclose orders as soon as they were placed, rather than saving up big deals to announce at air shows.

Trouble is, Boeing this year has had almost as many cancellations as sales. It has logged 76 orders, including 53 for the 737, 10 for its 777 widebody and 13 for its forthcoming 787 Dreamliner. But airlines have cancelled 66 previous orders, including 58 for the 787, leaving Boeing with a net order tally of only 10.

Airbus has had cancellations, too, though not as many as Boeing. As the air show opened, its net order tally stood at 11, including 21 cancellations. Orders booked during the show should boost the net tally to more than 100. True, there doesn’t seem to be much chance that Airbus will meet its goal of 300 orders this year.

But so far no customers have cancelled orders for its A380 mega jet – a fact that CEO Enders told me is “quite a miracle, considering what that program has gone through.” (On the other hand, several airlines have delayed taking delivery of their A380s.) And the order tally for the A350 now stands at a solid 493, well behind the 866 logged by the Boeing 787, but enough to get Boeing’s attention.

In fact, Boeing said at the air show that it may upgrade or even totally redesign the 777, in response to the A350. The first version of the Airbus plane, scheduled to enter service in 2013, is bigger than the Dreamliner and competes directly against the 777. Since July 2006, when Airbus began selling the A350 as currently configured, the two models in the same size range as the 777 have racked up 311 orders, while the 777 has gotten only 259.

No one could call this air show a stunning commercial success for either Airbus or Boeing. But as they head back to Toulouse, the guys from Airbus have a bit more reason to smile than their U.S. rivals do.