Boeing and Airbus: The Wide-Body Tug of War

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Wide-body planes form an essential part of aircraft makers' business as they support a higher price tag than their narrow-body counterparts. Boeing predicts that in the coming two decades, 36,770 commercial planes valued at $5.2 trillion would be delivered by plane makers. The wide-body planes would account for 8,600 or 23% of the deliveries, but could fetch $2.5 trillion or 49% of the total revenue. Boeing's French rival Airbus , too, foresees tremendous potential in the wide-body market. It forecasts that during the same period, 31,358 planes would be dispatched at a price of $4.6 trillion, and wide-bodies will account for 30% of total deliveries and 55% of value.

With trillions of dollars at stake, understandably, the two moguls of the aviation world are engaged in a fearsome duel to outdo each other in the segment. Let's take a look at the current wide-body backlogs to find out which of the long-haul planes are finding more buyers, and which ones are falling out of favor.

Boeing 787. Source: Flickr

Industry position
Boeing has a larger wide-body portfolio with the 767, 777, 787, and 747 families, while Airbus has A330, A350, and A380. Historically, the American plane maker has been stronger in the wide-body segment and its European counterpart in narrow-bodies, but both companies have sizable backlogs for wide-body planes. Boeing has four years worth of production backlog, while Airbus' stands at 5.2 years. The former, however, churns out a higher number of planes per month than the latter.

In 2014, Boeing has garnered net orders for 1,000 planes through September, of which 288 have been for wide-bodies. Airbus in turn has 791 net orders. As far as wide-bodies are concerned, it secured gross orders for 86 planes, but with a total of 93 cancellations, the net order position for wide-bodies through the first nine months of the year stands at negative seven. The biggest blow was cancellations of 70 A350 planes by Emirates in June.

Source: Bloomberg Intelligence

Planes in demand
According to Bloomberg analysts, Boeing's and Airbus' wide-body backlogs mainly constitute orders for their new built-from-scratch planes: 787 and A350. The 787 Dreamliner entered service in 2011, and A350 is gearing up to take to the skies later this year. At the end of September, Boeing and Airbus had 861 and 750 orders to fill for the two planes, respectively. Despite the numerous technical snags and delays that both the programs have suffered, airline operators are keen on these planes because of their state-of-the-art technologies -- carbon fiber bodies, new engines, aerodynamic wings, and of course unmatched fuel efficiencies. The 787 promises 20% more fuel efficiency than similar sized planes, while A350 touts 25% fuel cost savings over competing planes.

Boeing also has a big backlog for its popular 777 planes. The company has already delivered 1,239 planes ever since this wide-body entered service in 1995, and has orders for 566 more. To rekindle demand for the 777, Boeing is reengineering the plane. The new model, known as 777X, combines the best features of 777 and 787. The 777 backlog figure includes 286 orders for the 777X. The newer version will be powered by General Electric's GE9X engine, and feature an all-new high-efficiency composite wing, along with advanced aerodynamics. Boeing is promising 12% lower fuel burn and 10% lower operating costs than the competition. The 777X will go into production in 2017, and deliveries will start from 2020.

Airbus, too, is reengineering the A330 to strengthen its position in the medium-sized wide-body market. The new version, dubbed as A330neo, could attract as many as 1,000 buyers through 2030, according to Airbus' estimates. The plane made its debut at the Farnborough air show in July, and Airbus won commitments for 127 A330neos from seven customers, but these will not form a part of the company's backlog until the orders are confirmed by the airlines. Airbus will start delivering the A330neo by late 2017. 

Source: Bloomberg Intelligence

Jumbo jets are past their prime
Demand is falling for jumbos like Boeing 747 and Airbus A380. The 747 was the world's first wide-body jet and revolutionized air travel in the 1960s. To date, Boeing has delivered 1,494 of the 747 jumbo jets, which in its heydays was known as the Queen of the Skies. But as Bloomberg analysts point out, more efficient twin-engine aircraft and the global recession have killed the market for jumbo jets. Boeing has just 42 orders left for this iconic plane.

Airbus' superjumbo, the A380, has met a similar fate as demand has dwindled. However, the A380 backlog got a boost at the Dubai air show in 2013 when Emirates ordered 47 planes. Airbus has a total of 175 pending orders for this aircraft.

Source: Bloomberg Intelligence

Final thoughts
Both Boeing and Airbus have solid wide-body backlogs. The latest order trends show that demand for older airplanes is declining as airlines prefer newer, fuel-efficient aircraft. This is prompting the aircraft majors to come up with upgraded models, and the road ahead looks promising.

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