Field position

We're in the midst of a bit of a fever here in the Pacific Northwest. The local team, the Seattle Seahawks, is one game away from the "Super Bowl" of American football. So forgive me if a few sports metaphors slip through today.

For instance, there we were, more than two weeks into the year and finally yesterday we got a look at how the other team played in 2005. Except, I thought the game clock ran out back on December 31st. And this was January 17th. It's interesting that Airbus needed an extra period to reveal their score. I have my own private theory on that, which I'll share later.

Anyway, most of the headlines read that Airbus won a close orders race in a record year for commercial airplane orders overall. A lot of people have asked me over these past couple of days if I was surprised. And the answer is no. Not really. Airbus always seems to find a way to come up with bigger numbers.

To me, the real story is not about who got more orders or who delivered more airplanes in 2005. It was a big year for both companies. But the story itself is inside the numbers. It's really about which particular products did well this round and which stand to make it across the goal line down the road. And in that regard I really like Boeing's field position.

If you ask me what did surprise me, I'd tell you the big surprise is how poorly Airbus performed in the widebody segment. When you really break down the numbers, you see that the Airbus orders story is all in the A320 family. 82% of their orders were for single-aisles!

On the other hand, Boeing garnered about 70% overall of the high-value widebody orders this past year:

  • 63% of the market for 200-300 seats (787, 767)
  • 84% of the market for 300-400 seats (777)
  • 70% of the market for large airplanes (747)

It's obvious that questions surround the Airbus twin-aisle (widebody) strategy.

Here's what I mean. The Boeing 777 received 154 orders. Their A340 and A330-300 (the airplanes they match-up with our 777) received 15 orders each. Doesn't even seem like the same ballpark.

In the large-airplane market, the A380 recorded only 20 firm orders in 2005. The 747 more than doubled that order total with 43 net orders (including 18 for the new 747-8) in 2005.

That leaves us with the last category in the widebody market. The A350 ended the year with 87 firm orders - far short of predictions. The 787, going head-to-head against its competitor, gained 235 orders this past year. After several false starts, they're still making revisions to the A350. And no matter what it ends up being, the A350 has already sacked the 4-engine A340 line.

On the other hand, Boeing has a winning game plan for the twin-aisle market. We secured record orders for the 777 and 787 programs last year, a tremendous market response to these two game-changing airplanes. It's a balanced program, and the proof is that our orders in '05 comprised 44% twin-aisles and 56% single-aisles (including record orders for the 737 as well).

So as you really look inside the numbers you'll see why we believe we're better positioned for the future, and why we also like our share of the overall value of the market going forward.

Which now brings me back to the timing of yesterday's Airbus announcement. After all, January 17th wasn't just some random date decided in a coin toss or something. It happened to mark the one-year anniversary of this little blog! And because they chose to run with the ball on our special day, I'll have to talk blog some other time. Somebody ought to call a foul.