This Is How Airbus Beat Boeing in 2013
As the final minutes tick down toward the end of 2013, it's becoming clear: Boeing is so far behind Airbus in the race to sell planes this year... that there's just about no way Boeing can catch up.
Now how did that happen?
After all, just one year ago, Boeing absolutely crushed Airbus in a similar race to win sales. After subtracting out cancellations, Boeing booked orders for a net 1,203 airplanes of various shapes and sizes in 2012. That was 370 planes more than Airbus sold -- a margin of victory 44 percentage points wide.
But fast-forward 12 months, and here's how the numbers stand in these final days of 2013:
Boeing | Airbus | |
|---|---|---|
Gross plane orders in 2013 ... | 1,247 | 1,373 |
Minus customer cancellations ... | 161 | 59 |
Equals net orders for the year: | 1,072 | 1,314 |
That Boeing and Airbus should switch positions from winner to loser, and vice versa, so quickly is nothing short of astounding. And yet, if you dig deeper into the numbers, you can see how it happened.
Historically, Boeing's biggest moneymaker has been its 737 single-aisle regional jet -- its self-proclaimed "best-selling commercial aircraft in aviation history." With more than 11,500 orders placed since inception, and a backlog of 3,400 orders yet to be filled, this franchise looked unassailable. But in 2013, as Boeing focused on making up lost time from production delays at its 787 widebody program, Airbus found an opening to make inroads in the regional jet market.
You can see the results below, for Boeing...
Boeing | Single-aisle 737s | Widebody 777s and 787s |
|---|---|---|
2013 Gross Orders | 958 | 279 |
Cancellations | -161 | -9 |
2013 Net Orders | 797 | 270 |
Source: Boeing
And for Airbus...
Airbus | Single-aisle A319s, A320s, and A321s | Widebody A330s and A350s |
|---|---|---|
2013 Gross Orders | 1089 | 284 |
Cancellations | -44 | -12 |
2013 Net Orders | 1045 | 272 |
Source: Airbus
What we've done here is set orders for Boeing 747 jets and Airbus 380s to the side, and just focused on the two businesses in their roughly comparable "halves" -- single aisles and wide-bodies. This makes it a bit easier to see what happened this year.
In a nutshell: Boeing and Airbus ran a dead heat on wide-bodies, but Airbus ran away with the race in single aisles. Across the two plane makers' combined fleets, Airbus sold 22.5% more planes than Boeing; but in single aisles, that margin of victory widened past 31%, with Airbus selling 248 more A319s, A320s, and A321s than Boeing sold 737s.
Foolish takeaway
And the good news for Boeing shareholders? In order for Boeing to recapture the sales lead from Airbus in 2014, all it really needs to do is sell more units of its already best-selling, lowest-price, most-profitable airplane. Gee -- twist their arm, why don't you?
Boeing's 737. Time for sales of this bird to go up, up, and away. Source: Boeing
Heads, you win; tails, you don't lose
So Boeing sold the most planes last year? And Airbus sold more planes this year? Well, as long as they take turns like that, both companies should serve their shareholders admirably... forever! As world-famous investor Warren Buffett tells us, there's no need to go searching for long shots. Pick your best ideas, bet on them big, and ride them to riches -- let other folks worry about the bobbles in the market. That's why our own CEO, nearly as-legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover three companies we love the most.
The article This Is How Airbus Beat Boeing in 2013 originally appeared on Fool.com.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
