Thursday, September 19, 2013

Favorite Things Part III: Lufthansa Order Is In

Well its here, splitting hairs with Airbus and Boeing. The order is in, and its 34 777-9X for Boeing in 2020. Airbus registers 25 A-350-9 for delivery in 2019 and after. Bloomberg and others report  the deal as a split. However Boeing takes the lion share on its unannounced (ATO for the 777X), expected later this fall in Doha.

The 19 Billion dollar order packs a wallop as a hedged order for both framers with Boeing appearing to have the larger dollar value than Airbus.

The purchase, Lufthansa’s biggest to date, is for 34 Boeing 777-9X Boeing aircraft and 25 Airbus A350-900s, the Cologne-based airline said in a statement today. Deliveries of the A350s will start in 2016, while the first Boeing 777 will be delivered in 2020.
Via Bloomberg:
"Lufthansa’s fleet renewal is part of an overhaul initiated under Chief Executive Officer Christoph Franz, who announced his surprise departure this week to join Swiss drug maker Roche Holding AG next year. Lufthansa already unveiled the purchase of new narrow-body Airbus aircraft this year, and the addition of the long-distance jets would help replace older Boeing 747-400 and Airbus A340-300 four-engine airliners that are more fuel intensive."
With that being stated and commonality of fleet thrown aside, Airbus keeps its front office perch near Lufthansa. Meanwhile Boeing has made a significant in-road into the European Market. Talking heads will interpret the order as a trend towards competitive bidding, and market adjustments for Lufthansa's new upcoming Inventory. I had hoped Boeing would have made a clean sweep of product line ordering, but that was not to be, since Lufthansa has a already strong order book with Airbus. 25 A-350 is respectable, but still opens the door for Boeing to make a case later, as wait time decreases for new 787 orders for all models. Airbus still needs to prove out the A-350 under market conditions. Airbus has taken a lower road in its technology approach and expects few glitches and set back during introduction of its models. The mid stretch in development may favor Airbus in the Markets as it may not experience those types of set back Boeing has for the last five years. If Boeing continues refining the 787 line and develops the new 777-X line built on lessons learned, it will win the long developmental race into 2030. 
The 787 has more over arching and robust technological advances than the A-350. It has just finished the critical period of proving its quantum leap through commercial flight. Glitches are diminishing with smaller scale and severity. The 787-9 test flight is the promised execution of a plan on time, where the 787 -8 promises stumbled for 5 years since 2007. The -10  will fold into the Boeing market with a solid suite of aircraft for every operation in passenger and cargo service. 
Lufthansa  appears to have held back on ordering  more  Airbus types and went for a game changer in the 777-X9. The expectations for the 777-X9 are phenomenal, otherwise, the A-350 1000's wouldn't have sat on the sidelines during this go around of orders. Boeing is starting to turn heads in Europe, much to Airbus' chagrin. Even though Airbus has made inroads in the American market, it appears that Boeing can and will compete in every market. The ticket paying customer's satisfaction will start purchasing the new aircraft, instead of framer loyalty, as now found at this time. Split orders are a sign that airlines really want to know who has the best airplane and services that will keep them flying.

Special Notation:
 Lufthansa is Airbus' largest customer with 19 A-380 in its fleet and many Airbus product on order and flying at this time. Its not a small thing that Boeing opened this door further as the German customer sits near its Airbus production for the giant A-380. Everybody in the know from both Boeing and Airbus, understands a sea change is coming, since Boeing is making good of its own aircraft future projections and Airbus didn't match it.