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Each year, Boeing  and Airbus engage in a fierce order battle. In 2017, Airbus won that battle by numbers, but in terms of dollar value, which AeroAnalysis ultimately considers to be more important, Boeing easily outperformed Airbus.

For 2018, Airbus expects to maintain a book-to-bill ratio of 1. By looking at the orders, we can see a combination of willingness to commit, pricing, product, and availability come together. Special attention will be paid to the mix of single-aisle aircraft and wide-body aircraft, knowing that a single-aisle aircraft costs roughly half or a third of a wide-body aircraft depending on the model.

In this article, AeroAnalysis will be having a look at the order inflow and deliveries for Airbus in January.

During the month of January, Airbus received a total of 20 orders:

  • CALC ordered 15 Airbus A320neo aircraft.
  • Spirit Airlines ordered 5 Airbus A320ceo aircraft.

What is worthy to note is that during the month of January, Airbus received 0 wide-body orders and 20 single-aisle orders.

Last year, Airbus received only four gross orders and two orders after cancellations. In January 2016, Airbus received 16 orders. So, order inflow for January 2018 does not seem that bad as previous years show that January tends to be a slow month. Averaging the net orders for the previous two years even shows that net orders were above average.

For January, the list price of the orders was $2.2B, but after discount, this likely is closer to $1.0B.

Deliveries in January

For 2018, Airbus has set a delivery target of 800 units. In January, Airbus delivered 27 aircraft or 3 percent of the aircraft it expects to deliver in 2018:

  • No Airbus A380 deliveries took place in January.
  • Airbus delivered two Airbus A330-300 aircraft to two customers in China.
  • During the month, Thai International Airways took delivery of two Airbus A350-900s, while Lufthansa and China Airlines received one aircraft each.
  • Deliveries for the Airbus A320 families were 15 current engine option aircraft and 6 new engine option aircraft.

Jet makers tend to start the year softly as deliveries more or less peak towards year end meaning. For the next 11 months, Airbus needs 64-65 deliveries per month on average. Airbus is expecting to deliver 800 aircraft depending on engine manufacturers meeting their commitments. The latest news on this is that shipments of A320neo aircraft equipped with PW1100G turbofans have been halted. What this does to the delivery target will likely become clear during the next Airbus earnings report briefing, but it is disappointing that Airbus is suffering from Pratt & Whitney not being able to live up to expectations.

Big positive during the year for Airbus should be the delivery of the first Airbus A350-1000, Airbus A350 deliveries hitting 100 aircraft per year and the first Airbus A330neo delivery.

Important to note is that low deliveries in the first months of the year are pretty common. Year over year, Airbus deliveries increased by two units accounting for roughly 3 percent of the full year delivery target, which is in line with last year’s share for January.

Book-to-bill ratio

For 2018, Airbus expects to maintain a book-to-bill ratio of 1. For Airbus, reaching desired book-to-bill ratios doesn’t seem like a big challenge, but there should be more emphasis on capturing more wide-body orders in the mix, especially given the challenges Airbus is facing with the Airbus A320neo. Looking at the monthly book-to-bill ratios does not say a lot, but you have to start somewhere. In January, Airbus booked 20 gross orders while delivering 28 aircraft indicating a .71 book-to-bill ratio. In terms of value, this ratio was .54.

Conclusion

As expected, Airbus started the year slow with orders as well as deliveries. The order inflow was slightly above average while deliveries also increased slightly.

Drawing conclusions after one month is early and unrealistic… after all, there are 11 months left, and we saw quite clearly last year that one single month can make a difference. For Airbus, it will be key to resolve engine issues on the Airbus A320neo program and successfully ramp up deliveries on the A350 program. AeroAnalysis is more optimistic on the latter than on the former but, on the long term, believes Airbus will sort out all issues on the A320neo program, allowing further production rate increases.