Who’s profitable within the dispute between Airbus and Boeing?

In the competition for global leadership in the civil aviation sector, the European manufacturer is ahead of the American rival

The world’s largest commercial aircraft manufacturers, Airbus (AIRB34) and Boeing (BOEI34), have released the results for the second quarter of 2022 in recent days.

The numbers show how, in the competition for global leadership from the sector of civil Aviation, Airbus is ahead of rival Boeing.

At the end of June 2022, the airbus recorded an order backlog of 7,046 aircraft. More than 50% higher than the 4,200 aircraft ordered by Boeing.

In the first six months of the year, the european manufacturer delivered 297 aircraft and recorded 259 net orders. In turn, the American competitor delivered 216 planes and recorded 205 net orders.

On the other hand, the invoicing gives Boeing was US$ 16 billion against the US$ 13 billion recorded by Airbus.

But even with this lower turnover, the company’s profits airbus were five times higher than those of Boeing, with US$ 660 million for the European company against US$ 160 million for the American company.

In the semester, this difference appears even more clearly, with Airbus that obtained a net profit $1.8 billion against Boeing’s loss of $1.08 billion.

This negative result from the American manufacturer was greater than expected, mainly due to a drop in defense and heavy provisions that it was forced to carry out in some programs, such as that of the future drone refueling of the Navy of the USA, O MQ-25.

The crisis caused by the problems of the Boeing 737 MAX Dreamliner, now authorized to fly on all continents, is waning but still weighs on Boeing’s balance sheet.

Boeing (BOEI34) optimism for the future

Still, Boeing’s management was optimistic.

The orders received at the air fair in farnborough increased the morale of the administration of the American giant, as well as the resumption of deliveries of the 737 MAX Dreamliner, which reached 31 copies per month.

The deliveries of dreamliner were interrupted for more than a year by inspections and repairs to correct manufacturing defects, and Boeing still has to spend about $2 billion on program provisions.

“O 737 MAX is back in the game, the worst of the crisis Covid lagged behind and we expect to generate positive cash flow throughout the year”, summarized the CEO gives Boeing, David Calhoun.

The long-awaited success of the second space capsule test flight starliner also gave a relief to the group.

However, Boeing is struggling to deal with a host of problems: supply chain bottlenecks, labor shortages and inflation.

“Even with strong demand, we will not seek to increase production rates or speed up our system,” the CEO wrote in a message to employees.

Airbus (AIRB34) concerned about the market

The same concerns faced by Airbus.

O CEO from the European manufacturer, Guillaume Faury, revised down the target to deliver aircraft this year from 720 to 700 units.

On the other hand, the executive is pushing his team to speed up deliveries as much as possible and is obsessed with increasing the production rate of planes.

However, because of complicated market contingencies, the airbus postponed by six months the goal of delivering 45 planes per month of the family A320, moving from the second half of 2023 to the beginning of 2024.

The company still has a target of producing 75 single-aisle aircraft per month by 2025.

Considering the figures for the first half of the year, the airbus has a competitive advantage in this race for greater production: more available financial resources. And that could make all the difference in the dispute with the Boeing.

Source: Exam