The world’s largest aircraft manufacturer Airbus has once again left its struggling competitor Boeing far behind in 2023.
Despite strained supply chains, the European manufacturer delivered 735 commercial aircraft, over 200 more than its US rival. At the same time, customers ordered more than 2,000 new Airbus jets – an industry record. The order backlog also reached a peak of almost 8,600 aircraft. CEO Guillaume Faury therefore wants to significantly expand aircraft production. Airbus shares rose to a record high following the news on Thursday evening.
It has gained around five percent since the turn of the year. In terms of market value, Airbus is now moving closer to Boeing: Overall, the European group is now valued at more than 116 billion euros. The competitor from the USA came to the equivalent of 123 billion euros. Boeing shares have lost almost 15 percent since the turn of the year as a result of the near-miss of the best-selling 737 Max.
Despite the ever-growing order books, it will still be a while before Airbus builds as many machines as before the corona pandemic. Faury was confident that he would deliver more aircraft in 2024 than last year. The manager made it clear that the record number of 863 machines from 2019 will not yet be reached again. He wants to name a specific goal when presenting the annual balance sheet on February 15th.
Last year, Airbus exceeded its target of 720 aircraft deliveries by 15 aircraft, clearly leaving Boeing behind with its 528 deliveries. In 2022, Airbus had to cut its plans twice due to a shortage of components such as engines and seats and ultimately only handed over 661 new jets to customers.
The distortions caused by the Corona crisis are still not over for the manufacturers. Passengers are now back, as is the demand for modern and less fuel-thirsty aircraft. But bottlenecks among suppliers are causing problems for manufacturers. According to Faury, the situation in the supply chains has at least improved.
The new head of the Airbus commercial aircraft division, Christian Scherer, also assumes that the engine manufacturer Pratt & Whitney can supply enough new engines. The subsidiary of the US group RTX (Raytheon Technologies) has to replace parts on around 3,000 engines that have already been delivered due to a lack of materials. Pratt & Whitney’s German partner MTU MTU Aero Engines from Munich is also affected.
Airbus is not lacking in orders for new aircraft – quite the opposite. “We originally assumed that air traffic would recover sometime between 2023 and 2025,” said Scherer. But in addition to the need for medium-haul jets, demand for long-haul aircraft has also returned much earlier and stronger than expected.
Last year, Airbus collected orders for 2,319 new passenger and cargo jets. After deducting cancellations, there were 2,094 items, more than twice as many as in the previous year. Neither Airbus nor Boeing had ever booked so many orders in one year before.
As a result, Airbus’ order backlog grew from 7,239 to 8,598 passenger and cargo jets within a year. The increase corresponds to almost double annual production. Competitor Boeing received 1,314 net new orders and still had open orders for 6,216 machines in stock at the turn of the year.
The Airbus aircraft from the A320neo family in particular are in such high demand that, according to Scherer, production is fully booked until the end of the decade. Last year, almost 80 percent of the machines delivered and ordered were from this model series. Airbus also delivered 96 wide-body jets, including 64 A350s and 32 A330neos, as well as 68 of the smallest model, the A220.
In order to satisfy demand, management wants to expand production of the A320neo family from around 50 to 75 machines per month by 2026. That’s around one and a half times as many as Boeing is targeting for its competing model, the 737 Max. To achieve this, the Europeans are building new production lines in the USA and China. An additional line in Toulouse is already in operation.
The lion’s share of orders is now for the long version A321neo, which will be built at all locations in the future. A variant of the jet is the A321XLR (Extra Long Range): Airbus plans to deliver this smallest long-range jet in the world for the first time in the second quarter of 2024, as Scherer confirmed.
In 2019, Airbus had already replaced Boeing as the largest aircraft manufacturer in the world. The US company had just fallen into the worst crisis in its history after the crash of two medium-haul jets from the 737 Max series. Initially, the aircraft type was no longer allowed to take off anywhere in the world for more than a year and a half. Later, production errors and other defects in this model and other aircraft types repeatedly set the manufacturer back.
Since last weekend, more than 170 Boeing 737 Max 9 medium-haul jets have not been allowed to take off worldwide after a part of the fuselage came out during flight on an Alaska Air Group flight. The passengers narrowly escaped disaster.
This is how shareholders and analysts react
Airbus’ delivery figures for 2023 once again drove up the European aircraft manufacturer’s shares on Friday. In the morning they reached another record high of 147.70 euros.
Most recently it rose by 2.15 percent to 147.00 euros via XETRA and is one of the strongest stocks in the DAX.
The price rally that has been going on since the end of October, which only took a break from mid-December to the beginning of January, gave investors a profit of around 23 percent for this period.
At competitor Boeing, the rally initially went even better, with the price increasing by more than half from the end of October to just before Christmas. In the meantime, Boeing has already given back around 50 percent of the profits from the rally, so from a chart perspective the shares are clearly taking a hit.
There are reasons for the price development of the two aircraft manufacturers. While investors can look forward to positive news at Airbus, the focus at Boeing is on negative headlines.
Despite strained supply chains, Airbus delivered 735 commercial aircraft last year, over 200 more than its ailing US competitor. Airbus also exceeded its own goal of 720 deliveries. At the same time, customers ordered more than 2,000 new Airbus jets – an industry record. Exceeding one’s own delivery forecast should have a positive effect on the share price, a trader had already said before the stock market opened on Friday.
Boeing, meanwhile, is suffering from an incident involving a 737-9 Max aircraft. A fuselage part of the jet broke off during a flight. The US Federal Aviation Administration (FAA) then ordered this type of aircraft to be grounded over the weekend. The FAA launched an investigation that could go far beyond the problem with the specific component.
The share prices of the two aircraft manufacturers reflect the news – and they are increasingly decoupling from each other. Airbus’ papers have been far behind those of Boeing since the beginning of the year. In the still young stock market year of 2024, Airbus investors have an increase of 5.3 percent, while Boeing’s loss is 14.6 percent.
Airbus has clearly left Boeing behind on the stock market, and not just this year. In the meantime, both companies have also come closer in terms of market value. Here Boeing is still ahead with the equivalent of around 123 billion euros. Airbus comes to a good 116 billion euros. So Airbus doesn’t need much to catch up with Boeing here.
However, in view of the now high valuation of Airbus shares, Berenberg analyst Philip Buller advises selling them and prefers the stocks of MTU Aero Engines, SAFRAN and Montana in the sector as long as the supply chain situation does not improve significantly. The world’s largest aircraft manufacturer Airbus is starting the new year with a large order after its order record in 2023. The US airline Delta Air Lines is ordering 20 copies of the A350-1000 long-haul jet, as it announced when presenting its annual balance sheet on Friday in Atlanta. Deliveries are scheduled to begin in 2026. In addition, Delta said it secured options for a further 20 Airbus wide-body aircraft. The A350-1000 is the largest model in the Airbus catalog after the manufacturer stopped building the world’s largest passenger jet, the A380, due to lack of demand.
Last year, Airbus once again left its US rival Boeing far behind in terms of orders and deliveries. The European manufacturer received orders for more than 2,000 new passenger and cargo jets, setting an industry record.
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FRANKFURT / NEW YORK / TOULOUSE (dpa-AFX)