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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 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 report, AeroAnalysis will be having a look at the order inflow and deliveries for Airbus in August. The July report can be read here if you are a PRO subscriber, alternatively it is freely available to our Premium subscribers.

Order inflow August 2018

Figure 1: Orders Airbus August 2018

During the month of August, the company received a total of 5 orders:

  • Lufthansa (OTCQX:DLAKF) ordered 3 Airbus A320ceo aircraft, probably to maintain capacity as the airline uses its last spare engine for the Airbus A320neo.
  • Air New Zealand (OTCPK:ANZFF) ordered 2 Airbus A321neo aircraft.

We can be brief about the order inflow in August – it was again not strong. In July, Airbus announced 501 orders and announcements during the Farnborough International Airshow. After slicing and dicing the numbers, we got to 93 orders from 5 customers that we could reasonably expect to be finalized, as they were announced as new firm orders.

What the July and August order numbers reflect, however, is that out of 93 orders only 8 orders have been finalized, which is less than 10%, and there are no other orders that were finalized outside of the Farnborough International Airshow. This means that the remaining 85 orders announced during the show have not yet been completely finalized. Orders not being fully finalized but announced as firm are not uncommon, since firm order announcements get added to the book once all contingencies are cleared – but booking just 8 previously disclosed orders in the 2 months after announcing 500+ orders and commitments and almost 100 firm orders, that’s pretty bad. It leaves big question marks about the form of press releases.

So far, order numbers have not been blowing us away, but when comparing the first 8 months this year to last year, we observed that order inflow increased by 9 units and net orders improved by 4 units. Orders definitely are not the correct metric to measure current performance, but with all the negativity surrounding the Airbus A320neo program and slow wide-body sales, you would almost get the impression that the company is getting no orders or at least less orders, while the contrary is true.

Last year, Airbus received 12 orders in August, while 2 orders were canceled. In August 2016, it received 144 orders, while 29 aircraft on order were scratched from the order book. Averaging the net orders for the previous two years shows that with 5 orders, the net order inflow was far below the average of 62-63 orders in August.

For August, the list price of the orders was $0.56 billion, but after discount, this likely is closer to $0.25 billion.

What we are seeing is that announced orders are not orders that were fully finalized but are pending finalization. Currently, we are expecting that many of these orders will be finalized before year-end. It does make us wonder when commitments, which are not firm orders, can be expected to be fully finalized.

Deliveries in August 2018

Figure 2: Deliveries Airbus August 2018

For 2018, the company has set a delivery target of 800 units for native Airbus aircraft and 18 Airbus A220 aircraft in the second half of the year. In August, Airbus delivered 45 aircraft, or 6.6 percent of the aircraft it looks to deliver in 2018:

  • The company delivered no Airbus A380s during the month.
  • It delivered 5 Airbus A350, slightly lower than the production rate of 10 aircraft per month (11-month cycle) that it hit in April on the industry side. A higher load efficiency is expected towards year end.
  • It delivered 4 Airbus A330 aircraft, which is slightly lower than the production rate.
  • Deliveries for the Airbus A320 families were 11 current engine option aircraft and 31 new engine option aircraft.

Year over year, Airbus deliveries in the first 8 months increased by 35 units. The increase can be attributed to backloaded deliveries from the start of the year being delivered in the second half of the year, though we believe the current production output is not reflective of targeted production rates, and even with backloaded deliveries, Airbus is facing a mammoth-sized challenge to reach its delivery target.

Airbus A320 program deliveries decreased by 21 units. The positive is that since May, the company has started to deliver more Airbus A320neo aircraft than Airbus A320ceo aircraft, but so far this year, we are not seeing this back in the delivery profile. Obviously, the deliveries from earlier this year are backloaded, but what should happen in the coming months is a combination of living up to the production rates and the push-out of the backloaded deliveries. That is a challenging task for the remainder of the year.

Book-to-bill ratio

For 2018, it 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 the company 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 August, Airbus booked 5 gross orders while delivering 54 aircraft, indicating a 0.1 gross book-to-bill ratio. In terms of value, this ratio was 0.07. For the first 8 months, the gross book-to-bill ratio is .64, and is .8 in terms of value. The satisfactory order inflow during the Farnborough International Airshow has not been visible so far.


In August, Airbus just logged 5 orders in its official order and delivery book. We believe the company is saving many of the orders announced at the Farnborough International Airshow for December.

Reaching the delivery target is still possible, but we also need to point out that even the slightest of delays or new problems on the Airbus A320neo could dent the delivery target significantly. So, the company needs a strong second half of the year and a perfect 4th quarter to reach its targets. Further delays will definitely result in missing the delivery target for 2018. In the coming months, in the absence of any new supply chain issues, we expect backloaded deliveries to be reflected in Airbus single-aisle delivery numbers.