January 11, 1998 in Nation/World

Sales Boom Helps Airbus Close Gap On Boeing But Boeing Claims Lead In Firm Orders, Market Share, Total Value

Karen West Seattle Post-Intelligencer
 

Marking the biggest sales in its 28-year history, Boeing’s arch-rival Airbus Industrie announced Tuesday it won orders and commitments last year for 671 commercial jets worth $44.2 billion.

But Boeing’s preliminary year-end estimates show the company still leads Airbus in firm orders, market share and value.

The four-nation European consortium said it received firm orders for 460 airplanes valued at $29.6 billion and another 211 signed purchase commitments. Airbus said there were 22 cancellations, leaving 438 net new firm orders for the year.

“The (Airbus) numbers show that they are competitive but I don’t think the wolf is at the door for Boeing,” said analyst Wolfgang Demisch with BT Alex Brown in New York.

Boeing is still tallying up its year-end log book, but said preliminary firm orders, excluding commitments, for 1997 were in the range of 550 airplanes worth more than $40 billion.

Firm orders are signed sales contracts accompanied by non-refundable deposits, while commitments include letters of intent and memoranda of understanding.

Regardless of whether Airbus won the 1997 aircraft competition, its sales performance last year was its best ever and moves the consortium closer to its goal of undercutting Boeing’s historic dominance of the worldwide commercial aircraft market.

“We are now well on course to achieving our objective of a consistent 50 percent market share early in the next century,” Airbus Managing Director Jean Pierson said in a prepared statement. “The way in which our product family, our strategy and our people have been able to take advantage of the upturn in the market in 1997 has been outstanding.”

Airbus, based in Toulouse, France, last overtook Boeing in the sales race in 1994 when it logged 125 orders to Boeing’s 120.

Airbus plans to raise its aircraft production by 30 percent to turn out roughly one plane every working day this year, to meet deliveries of 235 aircraft.

That is compared with last year’s output of 182 planes, a 50 percent rise from 1996 deliveries.

While Airbus has accused Boeing of inflating its market share, a Boeing spokeswoman said Airbus’ method of calculating market share is “highly questionable.”

Analyst Demisch said the only true way to determine market share is through aircraft deliveries, and in that area, Boeing is still the leader.

“The orders in this business are reasonably volatile and not the best measure of what you’re doing,” Demish said.

Boeing is expected to deliver 550 commercial jets this year, a 47 percent increase from the 375 it sent to customers last year.

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