Boeing’s chief marketing guru Randy Baseler could afford to be a little smug, but he resisted the opportunity – just. On a stopover in London this week he called a last-minute press briefing to cast the rule over last year’s record order year and the manufacturer’s evolving product line.
Arch rival Airbus may have pipped Boeing in numbers of aircraft orders – 1,111 against 1,029 units – but as our sister publication Flight International has calculated, in terms of value, Boeing is the clear winner. Based on average list prices, it racked up orders worth $111.5 billion compared to $91 billion for Airbus. Not that it really matters, other than in public relations terms.
Where Baseler is really smiling is in the performance of its twin-engined 777 widebody, which racked up an impressive 154 orders in 2005 and now has 827 orders from 43 customers worldwide. He is particularly pleased to compare this record sales year with the efforts of Airbus with the four-engined A340 – it picked up a meagre 15 orders last year (and obtained three cancellations). Baseler doesn’t boast too much tough, he remembers when he was getting similarly pasted by his competitor just a couple of years back when 777 orders dwindled to a trickle.
It hardly needs us to add to the prevailing view by many outside of Toulouse that the A340 needs a mid-life upgrade to make it competitive on a wingtip to wingtip basis with the 777. Some form of commercial or cashback arrangement may provide carriers with an incentive to order the A340 in the short-term, but a longer-term solution will be required.
“2005 was an absolutely over the top year,” says Baseler, who writes his own blog which is well worth visiting. “In a year like last year there were several things going on that propelled it,” he says of the order boom. “There are a lot of new airplanes being offered that won’t be delivered until five, six or seven years out – it has nothing to do with near-term demand, it is to do with future demand.”
“There are also larger blocks of orders than before,” he explains, with carriers prepared to place larger orders to obtain quantity discounts. So where airlines were once happy with orders for 10 or 20 aircraft, orders for many more are now commonplace.
We don’t want to be killjoys, but healthy orderbooks do not necessarily say too much about the performance and outlook for the airline business, as our columinist Chris Tarry observes in the February issue of the magazine. We wish it were different, but it’s not.
As for 2006, neither Airbus nor Boeing will make predictions for order levels. Both were taken by surprise with the intake in 2005. Don’t be surprised though if levels stay strong, albeit back from this most recent peak.