Saturday, June 24, 2017

Paris Airshow, The Calm After The Storm (Updated show numbers**)

The show's business is completed and the CEO's are back on the manufacturing farm. Winging It is taking a stab at making a snapshot list of what just happened with Boeing at the show. A prior article was written using the same charts but some updates were made and a net Book value based on list prices is added.

Direct purchases and MOU's are added in the net column at the stated show value. The "Purchase-Conversion" transactions are netted out as those numbers replace a prior booked value from prior purchases over the course of multiple periods. Even though a working number for the show has been reported between 78 and 73 billion, Winging It has taken a different tack since all deals will be completed in the up-coming months. 

Figure 1. is a recount of what Winging It thinks just happened to the Boeing order book from the Paris Airshow.

Fig. 1 Updated 6-14-2017 with 125 undisclosed Max 8's for $14.1 Billion from the error of 1.4 Billion reported earlier. This updated gross booked total to $104 Billion and the net total $81 Billion. Thanks for your patience for any errors made during the airshow and after.

Fig 2. (click inside a chart for an expanded view.)

The above chart is an example of the "Purchase-Conversion" part of the show. There were 214 of the 737-10 ordered in this manner. Winging It assumes all prior purchases were for the 737-MAX 8 and were converted into the 737-MAX-10's in this case. There were reported about 147 direct 737-10 purchases and those were added to the book at list value for 124 million each, thus making it part of the gross billion number. 

The netted number is factored when Winging It assumes a List price of 112.8 million per 737-Max 8 as already booked before the show, and is now turned into a 124 million per Max-10 booked at the show. The net incremental change uses 214 units, increasing the book by $2.44 billion. 

The total for the gross purchase-conversions of transactions represents about $25.6 Billion dollars for the Max-10, increasing the book by only a net $2.44 billion.

If Boeing did write-up (purchase/MOU) about 150 units directly for the 737-10, then those would add about $18 billion is sales for this type at the show. All-in-all, Boeing netted about $20.5 billion to its books from the 737-Max 10.

Boeing wrote paper for a gross of about $104 Billion with a net book value of about $81 billion. It could be that there were some missed announcements and deals during the show, since it was even crazy for the plane framers to keep track. At the end of it all, waiting for final numbers will come during the first ten days of July from both Airbus and Boeing. Having stated that, Airbus knows it lost and Boeing has a lot of momentum going forward. 

There are several large and hanging Boeing transactions not announced at the show and those deals may be announced at Dubai this fall. Keep on keeping on and the next Airshow should settle the year.

Wondering why Winging It is in variance with press reports is a concern since many report Boeing had 571 units in sales for $79 billion booked. I had reported the list of Airshow transactions as reported and entered it into a chart using list prices and came up with an abundance of dollar value.

After looking at the data the Purchase-conversions were not included in the chart, thus showing 613 units for the charts. The unit number is 42 units higher than the reported show number of 571 units, however the Value total is in line with reported show totals of $79 billion. Refer to Figure 3 below for the adjusted Winging It chart and a closer reported result.

Fig. 3

Is the 42 difference due to 42 CDB units as a mislabeled transaction (help would be nice for correcting the charts)? Somewhere the data is reported differently at the end of the show than what was reported by various sources during the show. We all will have to wait when Boeing issues its reports next month. 

Additionally, the chart records 10 more 737-10's as a direct purchase with 157 when final show numbers report 147.