Thursday, March 9, 2017

The World's Biggest Builder, Airbus or Boeing?

The information may mark a plummeting of orders taken for the mega aircraft builders during 2017. However, it should not mark a declining production pace for the current year 2017. These numerical relationships will lead to conclusions about the long term health’s of the two manufacturers in the world market place. The place to start on this endeavor is the definitions about the charts below

  • Backlog: The number of Units on order but not delivered since beginning.
  • Year To Date: Current point in time of year summing totals occurring since first of same year.
  • Book: Airplanes Ordered YTD
  • Bill: Airplanes delivered for money is billed and received YTD
  • Book to Bill Ratio (BB): For airplanes ordered are divided by airplanes delivered, in units and value. The constant pace objective is for a 1/1 ratio. Any BB rate under “1” suggest a shrinking backlog. Any book to bill rate above “1” indicates a growing backlog.
  • List Price: The catalog price without any deductions applied from its transaction agreements. Usually the actual sale price is about 40% to 50% under its respective list price. However, the charts below only assumes the published list price valuations by the manufacturer for every aircraft ordered or delivered.
Fig.1 Summary Report Please read guide below Fig. 9 charts for explanations.

Fig 2. Boeing Single Aisle Orders

Fig. 3 Wide Body Orders Reported

Fig. 4 Boeing Single Aisle Delivered as reported

Fig. 5 Boeing Wide Bodies Delivered as reported

Fig. 6 Airbus Single Aisle Orders

Fig. 7 Airbus Wide Body Orders

Fig. 8 Airbus Single Aisle Delivered

Fig. 9  Airbus Wide Body Delivered

Disclaimer and qualification about the data:

Boeing has the lead as the World’s Largest Airplane producer at this point in time during 2017. Investors may want to examine this “as is” data and a general guide. The manufacturing performance and future potential requires a more exacting analysis. A more critical and detailed accounting can be obtained from the respective company’s financial records having complimentary annotations containing exceptions and notations for every of its account status. Therefore, this summary is not intended for financial investment advice nor is it intended as a guidance for any future stock investment. It is only intended as a general snapshot of comparative data with its historical backlog and current year to date information provided by each manufacturer’s websites.  

What is Known:

As a starting point for this year’s charts, the backlog on January 1, 2017 is the beginning number using all aircraft orders and deliveries from its beginning. Boeing Backlog is 5,695 units and Airbus Backlog is 6,836 units. It is important to understand that during the prior years, each manufacturer has written-off some unfilled orders as programs expire or the models are no longer required due to advances and replacement models such as the original 737 is replaced by the 737 Max and some orders in time maybe written-off containing models no longer available.

The backlog can be adjusted at the start of each year as more information becomes available while adjusting the year end reporting and recognizing changes from closing accounting entries.

The start of this year’s backlog is derived from both Airbus and Boeing data available on its respective websites. The number uses list prices and model types of undelivered units for this basis. The YTD information adds or subtracts from this base number establish at the beginning of the year. In this case the beginning of 2017.

Boeing has had a middling first two month when reaching production expectation and orders placed where Airbus has a dismal start for 2017. The orders and delivery number for 2017 through period 2 are available with this report. One big month of orders by Airbus could catch Boeing and it likely Airbus will have a few surprises by year's end, as it usually likes to report mega orders through any December 31, ** ending. Boeing pulled an Airbus routine during 2016 by announcing a large quantity of last minute orders as if spying the competition is alive and well. It is important to Airbus to always go big over anything else on the planet, like a spoiled child wanting its Ice Cream.

It must frustrate the Airbus YTD people as it shot its order wad at the end of 2016. Both manufacturers will have a "same production different year" experience, but Airbus drained its swamp at year's end before 2017. However, Boeing is plodding along its merry way having multiple orders in waiting and some unfinished business yet to reveal itself after the first two months of 2017. Expect an Airbus order revival by quarters end.

The third period data will be interesting for both framers. The BB ratio starts to take form by that time and onlookers will start to predict BB information as financial pablum for investor's. Winging It has no predictive input at this time. This is a spectator sport having a Vegas slot machine running 24/7 in the background. However, dice will be rolled just as lemmings jump into the ocean once in a while.

Backlog and what it may mean to the Framers: 

Backlog is the wick length on the lantern. Resources are the supply chain, manufacturing capacities and capable personnel pooling up as oil for the lantern. The flame size is the delivery capability. Airbus has more wick for its oil than Boeing has for its flame. Airbus cannot turn up the flame inspite of wick length where Boeing has turn up its flame consuming more wick and oil making it the world's largest aircraft maker at this time. If Boeing is to sustain the flame it must have more oil and wick where Airbus needs more oil and flame before its wick becomes too long to burn efficiently. This is the picture of these charts. Its a balancing act and requires constant attention. The relative numbers provided suggests, where adjustments must be made for the strongest long burning flame possible.