Wednesday, March 15, 2017

Is The Era of Mega Orders Over?

This is a perplexing question for both mega builder Airbus and Boeing where they both come out and stated it will be a soft sales year. Boeing has stated it can replicate 2016 order numbers during its 2017 campaign. Airbus acknowledged a tough year ahead for maintaining its blistering pace set during the last half dozen years. Typically, Airbus has kept an above 1,000 airplanes ordered for about a half dozen years. It likes to announce massive end of year orders in January of each year for the prior year ending. This year Boeing had a shot and added over two hundred orders at the end of the year, but couldn't catch Airbus as it held out with its last minutes orders reported.

The year to date ending in February 2017 has Boeing with 58 net orders and Airbus with -8 net orders after sixty days.

2017 has started slow as Boeing has a nominal lead over Airbus, which can quickly evaporate in one Airbus reported deal. However, it also means the prediction of a slower order year is probably a reality from its own analysis. If Boeing can hold serve by replicating last year’s numbers and Airbus finally has padded its backlog too far, customers can wait before placing another order with it. 

A Competitive travel market keeps the mega manufactures in balance of each other. The airline who can renew or expand fleets the fastest will best its competitors. Those customers are always seeking timely deliveries from the builder. The plates are spinning in the air. A builder needs orders and another builder needs production and its customers need airplanes just-in-time. 

The 2017 summary awaits the airshow announcements and December surprises before correctly analyzing who is right on the question of the era of the mega order being over.