Thursday, June 16, 2016

Woe Is Me: Airbus Has a Battery Of A350 Delivery Problems

Airbus is giving Boeing a chance to crank out 12 787 a month over the next several month as A350 production languishes from a battery of supplier problems. The 2016 goal for Airbus was to produce about 50 A350's during 2016. However interior supplier problems have arisen and are being resolved of course over the remainder of the year. The Airbus production outlook has dropped below the 2016 50 unit production outlook where it may only deliver in the low forties. 

This slows the Airbus A350 units to market. Case in point is the recent Boeing 787-9 delivery to United Airlines, seating 252 (seat guru) flying from San Francisco, CA, to Singapore, after which Singapore Airline is going to receive its first A350-900 about four months later for a competitive flight from Singapore to San Francisco. The Singapore A350-900 will seat 253-257 seats as it has announced.

Airlines notice who is doing what to whom in the market place suggests Boeing has an advantageous backlog over Airbus as it delivers more than twelve 787 a month at times. This opens opportunity for its customers in the market place. An airline can order a 787, and it can expect a firm delivery date for said purchase. Airbus has a mushy production schedule at this time and will promise customers an "about" delivery time for any A350 purchase. 

In fact, the Boeing 787 backlog is less than the Airbus A350 backlog by a comparative number of 733 units in backlog for Boeing and 778 for Airbus. The Boeing build rate will increase pressure for Airbus customers when it decides on what airplane product to choose as production slots tighten up with its customers from the Airbus slower delivery pace. If Airbus delivers twenty-one more A350's during 2016 from this date, it will fall way short of Boeing's 787 production pace of more than seventy-two additional 787's before the end of this year.

Without any additional orders for the two competing Airline framers, the back order for 2016 ending, should be about:

Estimation for market backlog by end of 2016:

Boeing 787’s      665
Airbus A350’s     772

Boeing has about 107 more wide body slots available over Airbus backlog by years end. The potential future sales opportunity may steal customers from Airbus in the second half of the year since Airbus will have a difficult case for when a customer will exactly receive an A350 when ordered.