Airbus Outdoes Boeing in ’01 Deals
Airbus won contracts for more new aircraft than U.S. rival Boeing Co. last year as airlines placed orders for the European plane maker’s new 550-seat A380, which will be the largest commercial jet.
The Toulouse, France-based company had about 367 new orders, down 30% from the year earlier, while Chicago-based Boeing won contracts for 335 aircraft, a drop of 45%, as the economy slumped and the Sept. 11 attacks hastened the decline in air travel. Airbus received 85 firm orders for its new plane.
The A380, which is scheduled to enter service in 2006, will break the U.S. firm’s monopoly in large aircraft, dominated by the 420-seat Boeing 747 for three decades. Airbus now competes with Boeing in all plane sectors.
“With the range of aircraft Airbus now has out there, it’s no surprise they beat Boeing,” said Howard Wheeldon, an analyst at Prudential Bache Ltd. in London. “It’s a pattern that we don’t expect to alter over the next few years.”
The A380 has a list price of $240 million, though the first customers were given discounts by Airbus, which analysts have estimated at about 25%.
Customers for the plane include Air France, Deutsche Lufthansa, Singapore Airlines, Virgin Atlantic, Qantas Airways, Emirates Airlines and International Lease Finance Corp. FedEx Corp. has made a commitment to buy 10, though it hasn’t yet signed a firm contract.
Winning more orders than Boeing doesn’t necessarily mean more profit for Airbus, said analysts, who expressed concern that the European plane maker may be too willing to cut prices to beat the competition.
“More orders bringing more profitability is not always the case by any means,” said Paul Nisbet, an analyst at JSA Research in Newport, R.I.
Boeing put market share ahead of profitability in the early 1990s, then reversed that policy when Harry Stonecipher became vice chairman. “Presumably they have not taken any orders that are not deemed to be profitable,” he said.
Airbus’ orders last year were the lowest since 1995, while Boeing’s were the lowest since 1994. Airbus has beaten Boeing two of the last three years. Boeing delivered 527 jets last year, compared with 320 for Airbus.
