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Airbus Got a Big Order Boost in June


In the first five months of 2019, Airbus (NASDAQOTH: EADSY) and Boeing (NYSE: BA) both recorded more order cancellations than new firm orders . The demise of India's Jet Airways and fleet-plan changes at a couple of other airlines more than offset the new orders Airbus and Boeing received during the early part of the year, which tends to be seasonally slow for commercial aircraft order activity.

However, last month's Paris Air Show presented a great opportunity to make up some ground. Airbus took full advantage, booking more than 100 orders in June. Meanwhile, Boeing continued to limp along, primarily due to the grounding of its top-selling product, the 737 MAX.

Airbus gets back in the black

The main highlight of the Paris Air Show was the sales launch for Airbus' new A321XLR jet. This ultra-long-range version of the A321neo will have more range than any other comparable narrow-body aircraft. Airbus landed 44 firm orders for the A321XLR last month, in addition to dozens of nonbinding commitments.

Airbus also won plenty of orders for other versions of its best-selling A320neo family at the Paris Air Show. For the full month of June, Airbus booked 130 firm orders for A320neo-family jets, as well as 15 firm orders for the smaller A220 family. The European aerospace giant has now booked 88 net firm orders in 2019, swinging back into positive territory after recording negative 57 net orders through the end of May.

A head-on view of an Airbus A320neo flying over water

Airbus received lots of orders for A320neo-family jets at the Paris Air Show. Image source: Airbus.

The one disappointing aspect of Airbus' performance at the Paris Air Show was that it is still struggling to sell wide-body jets. The company received two dozen commitments for its A330neo from Cebu Pacific and Virgin Atlantic that have yet to be finalized, while the A350 didn't receive a single order or commitment.

Boeing's order activity remains anemic

As expected, the grounding of the 737 MAX put a damper on Boeing's sales at the Paris Air Show. In fact, Boeing failed to book a single new order for its 737 family during June.

Boeing had slightly better luck in the wide-body market last month, but not by much. The American aircraft manufacturer recorded an order for six more 767-300 freighters from FedEx , an order for a 787-9 Dreamliner from Air Lease , and an order for two 777 freighters from DHL.

These nine new firm orders were offset by three cancellations, giving Boeing six net firm orders in June. That left it deep in the red on a year-to-date basis, with negative 119 net firm orders in the first half of 2019.

Time to start firming up commitments from the Paris Air Show

While Airbus reported solid order numbers for the month of June, its year-to-date order total is subpar from a historical perspective. Boeing is in an even worse position. That said, both companies received lots of nonbinding commitments at the Paris Air Show. If Airbus and Boeing can get those orders firmed up in the coming months, it would go a long way toward achieving a respectable number of orders for the year.

Airbus received hundreds of commitments at the Paris Air Show, highlighted by a letter of intent for 100 narrow-body jets from Air Lease, a fast-growing aircraft leasing outfit. Meanwhile, Boeing got a surprising commitment for 200 737 MAX jets from International Airlines Group , which owns several major European airlines. Boeing also announced letters of intent for about two dozen 787-9s and several 777-family jets.

Both jet makers have already made some progress on finalizing orders in July. Earlier this week, Qatar Airways firmed up an order for five 777 freighters. And Air China said on Thursday that it had ordered 20 A350-900s from Airbus.

That said, Airbus and Boeing have been averaging nearly 1,000 net orders each in recent years. Even if they were to finalize all of their outstanding order commitments before year-end, neither one would be close to that level. Thus, both aircraft manufacturers -- but especially Boeing -- will need to drum up lots of additional new business to make 2019 a decent year for orders.

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Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends FedEx. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Personal Finance , Stocks
Referenced Symbols: BA , EADSY



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