Airbus and Boeing's annual contest to announce the most orders is just like cricket (OK, stay with me on this one my American friends, but if you're one of our many Indian readers you'll know exactly what I mean.) At time of writing Boeing is 1,029 declared. A declaration is a cricket tactic in which the batting side decides it's set a target that it doubts the opponents can reach before the same number of players as it used are bowled out, and in the remaining time allotted for the game. Often leads to a draw - but not this time.
For ages now Boeing has declared in December and Airbus has cleverly said it won't announce its total until mid-January. Trivial of course, but crucially, in essentially a neck-and-neck race (OK - enough sporting metaphors), it gives them a last few orders that they can probably persuade customers to announce either in the year just gone - 2005 - or the one coming up - 2006.
This year the situation is particularly entertaining to the spectators. On the face of it Airbus has an awful lot to do to make up the ground. But it's well known that there are several big orders of uncertain status that could change everything. Airbus has a lot of clout with some customers who it might be able to persuade to help it along, but I doubt that the Chinese government - which has revealed 150 commitments for Airbus aircraft that don't currently appear in the order book - is one of them. And that could be the clincher.
Years ago, when Airbus was a distant number two, it turned the order contest into an annual battle of operatic magnificence, knowing of course that one day it would duly catch up. And it did, and the world was duly impressed. But conceding second place again now would have suitably Wagnerian overtones.
In fact Airbus absolutely loathes losing marketing battles, and in fact more or less never loses them. (Sales is not the same thing of course.) So if I were a betting man, which as it happens I am, I would say Airbus has kept something up its sleeve and I'm going to predict they will somehow or other sneak this one.
So there's something you can copy and paste and have a good laugh at my expense by adding it to the comments here on 17 January - which is when the final Airbus number comes out. But if I'm right...boy you can be sure I'll remind you.
As the BBC's magnificent Peter Snow says as he manipulates his graphics on British election nights, predicting the career-ending moments of a couple of hundred politicians - "remember, it's just a bit of fun".
on January 6, 2006 4:54 PM | Reply
Are you suggesting that an A320 order is worth the same as a 777 order? Airbus could have sold three hundred A320s last week and still not make up the gap on Boeing. Boeing sold 447 twin aisle aircraft. The Airbus total will be about half that.
Keesje.
Keesje
on January 6, 2006 5:49 PM | Reply
Even if Airbus can match or better Boeing's 1,029 gross order, the value of Airbus' orders in 2005 will be significantly less than Boeing's. Airbus is unlikely to get too many more than 200 widebody orders this year. Boeing has 457 gross orders for widebody airplanes (48 B747s + 19 B767s + 153 B777s + 235 B787s).
Andrew
on January 7, 2006 8:58 PM | Reply
From the moment Airbus cought up with Boeing both have fought their respective disinformation war. Airbus has always announced orders where downpayment was made whereas Boeing included in its polls even simple letters of intent. If Airbus manages to firm some of the spectacular orders it might just catch up. This would be another nice victory over the eternal rival. Boeing in turn has always downplayed the erosion of its marketshare and has measured by gross value of the aircraft sold. The fact is that both ways of accounting are correct.
So both sides may feel as the winner of the year. It should however not be forgotten that every Airbus narrowbody placed is an opportunity missed for Boeing. The same is true for widebodies. And if Airbus launched in turn a more efficient series of widebodies which would make the Boeings look old?
Fortunately there is such a fierce competition. No side can loose since the weaker immediately gets support from the customers so that it can remain alive. Its after all the airlines that benefit from the competition. Wait and see...
Daniel
on January 8, 2006 11:50 AM | Reply
Of course these numbers don't reflect vlaues - which is why I describe the whole thing as a bit of fun. And in 2005 there's no doubt who would have the higher order value. And it wasn't me (or Flight International) that started the annual order-race. (And in fact, I think we can make a good case that we were the people who drove the marketeers into issuing net rather than gross numbers.)
Values are anyway hugely miseading of course as prices paid bear less and less relationship to sticker prices. And, even if you knew those figures, intelectually you have to feel differently about all those contests - often the big ones - where political issues outweigh both pricing and the quality of the aircraft.
Kieran Daly
on January 8, 2006 2:22 PM | Reply
Whatever happens to the 2005 year-end status what will never change is Airbus's poor loser image. Neither for that matter will its disinformation campaign or state funded strategies change anytime soon....
May the company with the better products win!
PS
on January 9, 2006 7:02 PM | Reply
One commenter has it bass-ackwards. It's Airbus that announces "orders" when all it has is a letter of intent. Boeing doesn't book an order as firm till it has the cash. Case in point: Watch what AB does with those 150 Chinese A320s -- if it books them as orders, it's horsefeathers. All that was was a commitment for all of China. There's no indication that the Chinese govt. has even allocated those airplanes to buyers.
Case in point, Boeing's 70 Chinese 737 announcement, which was a month earlier, has resulted in only 50 booked orders so far.
And I wonder if Airbus is counting the 10 A300 orders UPS canceled in 2005?
proxl
on January 10, 2006 6:03 PM | Reply
To proxl,
I don't know if Airbus is horsefeathers but what is sure is that Boeing has integrated 68 Air India orders which have not been yet signed (see http://www.flightinternational.com/Articles/2006/01/10/Navigation/177/203949/Indian+carriers+close+in+on+aircraft+deals.html)
in their 2005 order book. So who is the bad (loser or winner) ?
Huy
on January 11, 2006 12:05 AM | Reply
I do appreciate all the efforts you put in in keeping the image of Airbus high and whilst i do not have any personal grudge against Airbus, from an engineer's point of view, the example of the overshot runway by an A340-300 of Emirates, even though it was a pilot error, simply is another proof that such a problem can only happen with the Airbus aircraft.
So far, i have not heard of such an issue affecting pilots flying the 747 or 777 for example.Is it a matter of the joystick at the expense of the control column?At the end of the day,Boeing was still right in sticking to the control column. It only takes a pilot with both types to give all of us the real reason why. I leave that for you all to find out.
Viksing Iranah
on January 11, 2006 1:21 PM | Reply
I Think Boeing has always acted more transparently than Airbus.
Orders grabbed during 2005 have been posted by them, while Airbus will desperately try to convert commitments made in 2005 (and if successfull, turned into firm orders only in 2006) as if they were firm orders in 2005.
Oh come on....Be seriuos!
Kind Regards,
Beck
Beck Nader
on January 11, 2006 1:22 PM | Reply
I Think Boeing has always acted more transparently than Airbus.
Orders grabbed during 2005 have been posted by them, while Airbus will desperately try to convert commitments made in 2005 (and if successfull, turned into firm orders only in 2006) as if they were firm orders in 2005.
Oh come on....Be serious!
Kind Regards,
Beck
Beck Nader
on January 11, 2006 1:25 PM | Reply
Kieran, you're of course right in the fact that airliner values are hugely miseading as prices paid bear less and less relationship to sticker prices.
Therefore, it's the operating margins that are what really matters when order intakes are in the same ballpark. Just looking at the A320 program, it's interseting to note that it's currently generating considerably more profit per airframe than the 737. Why?
Well, for-starters, one could just look at the fact that Airbus planes cost less to produce than the equivalent Boeing models: http://www.leeham.net/filelib/ScottsColumn11012005.pdf
Only when Boeing has produced a significant number of the airframes that were ordered in 2005, can one estimate the operating margins for the order intake in 2005.
It's no secret that in the past, Boeing has slashed prices to undercut Airbus. During 2005 , Scott Carson vowed again and again that his company would outsell and "beat" Airbus.
If Boeing's future operating margins are not significantly improved due to a greater production output over the next few years, one could in due course infer that in 2005; Boeing actually "bought themselves back into the business": http://www.leeham.net/filelib/Rudy.pdf
Canute
on January 11, 2006 1:28 PM | Reply
>>Whatever happens to the 2005 year-end status
>>what will never change is Airbus's poor
>>loser image. Neither for that matter will
>>its disinformation campaign or state funded
>>strategies change anytime soon....
Poor looser image?
Hmm, that's a pretty absurd statement, don't you think?
Now, regarding "its disinformation campaign", I would guess you're referring to this article:
"Airbus composite safety claims infuriate Boeing" http://www.flightinternational.com/Articles/2006/01/06/Navigation/177/203909/Airbus+composite+safety+claims+infuriate+Boeing.html
Airbus is not questioning the safety of the 787 period.
The main issue with the 787's composite structure, which will be made using mandrel molding, is not the strength or manufacturing of multilayer materials; it's whether what you spare in fuel is not eaten back by increased costs due to problems related to regular airliner maintanance.
However, if you would care to read the following four papers, you should be able to realize that the use of mandrel molding might not be the most intelligent way of designing and building a composite fuselage.
(i)http://www.dlr.de/fa/institut/faserverbundtechnologie/veroeffentlichungen/index/2004_02.pdf
(ii)
http://www.dlr.de/fa/institut/faserverbundtechnologie/veroeffentlichungen/index/2004_03.pdf
(iii)
http://www.dlr.de/fa/institut/faserverbundtechnologie/veroeffentlichungen/index/2004_15.pdf
(iv)
http://www.dlr.de/fa/institut/faserverbundtechnologie/veroeffentlichungen/index/2004_16.pdf
If the management at Boeing is also starting to realize that the mandrel molding method might not be the holy grail of composite fuselage construction, it could explain why they are so touchy on any technical issues regarding the hull of the 787, and why they bizzarely seems to be "infuriated" with Airbus' alledged "safety claims".
Now, as for "state funded strategies", here's a link to a relatively recent paper from the US right-wing think-tank, the Competative Enterprise Institute. Clearly, the author is a libertarian and "free marketeer", but he's nevertheless providing more proof of American hypocracy regarding the "great" virtue of free markets.
"Boeing vs. Airbus, Clash of the Corporate Welfare Titans." www.cei.org/pdf/4679.pdf
----------------------------------------------
Excerpts:
Incalculable Benefits. The World Trade Organization will encounter all of these subsidies, and likely more, as it shifts its way through the benefits Airbus and Boeing each recieve from their respective governments. Which is the worse offender will be difficult to judge, because of the incalculable financial benefit that some of these government favors yield.
Considering how heavily subsidized Boeing is, though, one must wonder whether President Bush's Trade representative, by complaining about Airbus, is throwing stones from the front porch of a glass house.
-----------------------------------------------
Finally, to put into perspective your claim of a "disinformation campaign" championed by Airbus and the concept of arrogance in general; are you aware that in a 1985 presentation to visiting reporters in Seattle, Boeing vice president Thomas Bacher had this to say about the "prolonged" trade dispute:
"We've been very patient for the last 10 years, but now we're getting more impatient. In fact, we're getting very damn mad"
Boeing meant that if Airbus could not show a "profit", it should do "the right thing" and disappear -- which would've been allright by Bacher, who interestingly also concluded that "Europe builds beautiful trains and systems like that. I challenge the concept that everyone has to build everything."
Canute
on January 12, 2006 4:07 PM | Reply
Dear Canute,
Thanks for your interesting comments. The "disinformation campaign" I was referring is not necessarily the materials dispute but rather the commitment/sales battle. It should however not be forgotten that Boeing (and the U.S. Government backing it up) have also attacked Airbus on technical issues for decades. Now it is only fair that the Paneuropeans hit back. Not being an aerospace engineer I cannot judge which construction is better but I imagine there is something true at the criticism of the "plastic" fuselage.
Yours,
Daniel
Daniel
on January 12, 2006 7:40 PM | Reply
Fact of the matter is, Boeing booked (not committed, booked) Air India in December (when Indian Govt. approved).
And the same composite, Canute, that Boeing will use on the 787 has been used in the vertical stabilizer and rudder on the 777 for more than a decade. It is ridiculous in the extreme to suggest Boeing has no experience with this material.
proxl
on January 13, 2006 12:58 PM | Reply
>>Fact of the matter is, Boeing booked (not committed, booked) Air India in December (when Indian Govt. approved).
The 150 Chinese orders are at the same status. They are approved by the Chinese Govt. and reserved for 5 identified Chinese Airlines !
My sentiment is that both AB and B are playing with their order book, so please do not blame one or other ...
Huy
on January 13, 2006 6:21 PM | Reply
Hi Daniel,
I was only responding to what "PS" wrote, and not to your first comments, which I incidentally agree with fully.
However, I do believe that an analysis of the medium to long-term industrial strategies for the major two airframe makers, are somewhat more interesting than what transpired in the "great" sales war of 2005.
Proxl, I'm not questioning the material use of carbon fibre reinforced plastic in an airliner fuselage, nor am I saying that Boeing has no experience with CFRP (BTW, where did you hear that?). What I do question, however, is HOW THEY USE IT.
Canute
on January 16, 2006 2:47 PM | Reply
Even though Airbus could post better results than expected the fact is that in 2005 Boeing sold a huge number of 777 and 787 and the most part of Airbus sales are as of today A319/320 airframes.
Xavier