Tuesday, April 7, 2015

Boeing Already Dipped Under The Airbus WB Order Backlog.

If you ordered a A350 900, -1000 today when can you expect to get one? Boeing has about 847 undelivered 787's as of today. Airbus has about 778 undelivered A350's with two delivered in four months.

Boeing will deliver 120 787's this year and it will double that number until the end of 2016. Looking forward, with today's status report, and not counting new orders from this date in 2015 through 2016 its production numbers will total 240 +- additional 787's flying equaling almost 500 787 in customer's hands at the end of 2016. Airbus, if it builds 15 this year and possibly 60 in 2016, it will have 75 flying. This would include the two already delivered. I also look at Boeing guidance of 120 a year for the next two years. This would include the 30 already delivered for 2015. The Boeing number delivered is (90+ 120+258 = 468) 468, 787 delivered by the end of 2016.

The Boeing Countdown:
  • 90 Remaining deliveries during 2015
  • 120 delivery guidance during 2016
  • 258 delivered already, includes 30 delivered in first qtr 2015.
Total 468 delivered by YE 2016

Airbus Scheduled 15 A350 built in 2015 and Winging IT projects 60 A350 for 2016. In 2018 Airbus proposes 10 a Month A350's. By then the WB, in service gap, will widen with Boeing offerings than Airbus by a large margin.

*Flat estimations are frozen numbers from current data and production completions.

 Airbus A350  Boeing B787
2015 *Flat Orders Booked 780 1105

YE-16 Total Delivered Est.

75

468

Calculated unfilled Orders 2016.

705

637

As the chart indicates Boeing will have shrunk its order book beyond what Airbus can respond to during the next twenty months. Boeing has unleashed a 787 production juggernaut. The customers have noticed. They can get a 787 sooner than an A350. It can also get a 787-10 faster than an Airbus A1000, only If it orders now! All Airbus A350 orders placed today will come after a customer who receives a Boeing 787, if ordering the 787 on the same day as the A350. The 120 a year Boeing production pace passes a larger Airbus backlog easily in 2016, and will continue to grow in backlog order availability as the next 36 months go forward. Both aircraft manufacturers are positioned for taking on new orders, however an Airbus placed order hurts more for an earlier delivery time as it add backlog against Boeing's faster delivery pace, as compared with what a Boeing order will do to its backlog.

"If a 787 order is placed at the same time of a A350, the 787 will deliver first over the A350."

Going three years out in time,  Airbus starts lagging in the order pace having a larger backlog.
However, if the market looks at relative backlog as a order pacing metrics, Boeing will have the advantaged in wait time. If Boeing has a great 787 order year in 2015, then both companies will be in a equal position when considering its customers order flows and delivery time. All this assumes on gaining timely delivery times during a company's five year plans, and as manufacturers seek optimal backlog and wait times within a five year cycle.

"If Five Year Plans are critical to airlines, then the most flexible backlog wait time has the advantage over its competitor."

By 2018 Boeing will have a 150 aircraft order stream opened up over Airbus. It can take on 150 787 ordered in a given year and stay even or ahead of the Airbus' backlog wait time. By then Boeing will be delivering 12-14 787's compared with Airbus' guidance of ten a month. The delivery pace of Boeing keeps customers nearer to a delivery time when they order as compared to the Airbus production plan. Boeing will maintains its 3 year lead over Airbus and also expand its lead each when it produces 12-14 aircraft a month from its two plants.

Exhibit 1A:

Airbus A350 Boeing B787

2015 Flat Order Book 


780

1105

YE 2018 Delivered  Est.

Culmulative 

270 (1-1)

732 (1-1)

Unfilled Orders YE-18

510


373                 


Exhibit 1-1:


Prior years Delivery 75 468
2017 in year Delivery 75 120
2018 in year Delivery 120 144

Totals

270

732

Yes, there are slots created as customers change delivery times according to its own needs. A buying company can't wait for early slots before placing an order, otherwise it must depend on actual production dependability. Boeing has two separate plants mitigating any  production hiccups. Everett and Charleston are going big on the production floor, and can do so without obtaining another order for eight years.

The speed of which Boeing delivers, increases order potential over Airbus current capability, until it can fully reach maximum production output at the end of the next 20 months. Even though, Airbus capability may reach 10 A350 a month, it will compare with Boeings 12-14 787 a month corporate guidance during 2018. The Boeing/Airbus backlog gap will continue to grow from Boeing's capability of production and product efficiency steps found in its latest delivered airplanes. Vital 787 momentum, impels the buyer in Boeing's direction.