Airbus Opens Huge Orders Lead over Rival Boeing

Three quarters through the year and the debate over which plane manufacturer will land more orders and deliver more planes this year already seems to be over. According to Businessweek, Airbus has landed 1,038 net orders to Boeing’s 426.

Much of the separation between the two companies is due to the fact that Airbus acted quickly in announcing a next generation narrow body plane, the A320 neo while Boeing went back and forth over whether to re-engine the 737 or build a new plane altogether. Both companies decided to re-engine but Boeing’s decision came nearly a year later. For Airbus, this has meant a huge boost in orders for the year, potentially setting it up to top its previous best orders total.

Airbus has won 1,038 net aircraft orders, after 141 cancellations during the first nine months, the Toulouse, France-based company said today in a statement. That includes 918 neos, which offer more fuel-efficient engines than the existing A320 family.

Airbus’s record tally for net new orders was in 2007, with contracts for 1,341. An order today from Qantas Airways Ltd. for 110 A320s, will be included in the October listing. Combined with the prospect of additional orders at the Dubai Air Show in November, that put Airbus in reach of topping its previous high.

With massive backlogs, both companies recorded high delivery totals but the European plane maker still leads its American counterpart with 374 deliveries so far this year to Boeing’s 349.

The orders numbers may skew back toward Boeing a bit during the last quarter once major orders for the new 737 are announced but so far it appears that Airbus is well on its way to another dominating year.

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Boeing Delivers First 787 After Three Years of Delays

Finally. It took three years longer then scheduled but Boeing has delivered its first 787 to launch customer All Nippon Airways with the first plane landing in Japan early Sunday morning according to Reuters.

Boeing held a ceremony over the weekend at its plant in Everett, Washington where it handed over the first plane to ANA. Boeing’s CEO Jim Albaugh was on hand to present the new aircraft.

“It’s not often that we have the chance to make history, do something big and bold that will change the world in untold ways and endure long after we are gone,” said Albaugh. “That’s what the 787 Dreamliner is and what ANA and Boeing have done together – build what truly is the first new airplane of the 21st century.”

It was a bittersweet moment for Boeing as the plane represents one of the largest leaps forward in modern commercial aviation due to the use of lightweight, composite materials while also being plagued by numerous delays due to labor strikes, mechanical issues, and constant disruptions to its global supply chain.

With the plane finally delivered to its first customer, Boeing must now focus on ensuring that its production lines can begin chipping away at the 821 plane backlog that Boeing currently has for the 787. Due to its delays, it has become increasingly important that Boeing deliver more planes sooner in order to start making a profit off the plane which has been hugely popular but has yet to prove itself. The next couple of years will be critical in determining the long-term success of the plane.


United Looking to Place Huge Order

On the heels of a string of late plane orders over the past year, United Airlines appears set to place a major order for narrowbody aircraft sometime in the next six months Reuters reports.

“They (United Continental) are looking at it,” said one of the sources. “Airbus and Boeing are getting ready. (United) sees the timing as good, just like the other guys.”

Another top industry source said United’s order could be “something like 100 or 200 (planes), but less than American,” referring to a recent order for 460 single-aisle planes worth up to $40 billion from AMR Corp’s (AMR.N) American Airlines.

The trend recently has been for airlines to split major orders with both American and Air France KLM placing significant orders that were split between Boeing and Airbus. United hasn’t offered any indication that it will split the order or place an exclusive order with one manufacturer. The airline currently operates a mix of Boeing and Airbus planes with Boeing making up its long-haul fleet and Airbus making up a majority of its short-haul fleet. It’s entire fleet is set to get a boost in Boeing planes regardless as its pending merger with Continental will add Continental’s all-Boeing fleet as well.

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Boeing Postpones 747-8 Delivery Ceremony Over Contract Issue

Bloomberg is reporting that Cargolux will not receive its first 747-8 on Tuesday due to an unknown contractual dispute between Boeing and the European cargo airline.

Boeing had to cancel three days’ worth of ceremonies and events yesterday because of “unresolved issues” with Cargolux Airlines International SA, said spokesman Jim Proulx. The carrier was scheduled to fly its first load of freight on the new plane out of Seattle on Sept. 19 and take delivery of a second jet two days later.

Proulx declined to comment on the reason for the dispute, and Cargolux would only say today that there had been “contractual issues” that compelled its board, which met yesterday, to reject the planes.

With Boeing currently working on delivering two new planes, the brand new 787 and the re-designed 747-8, which are both years behind schedule, the last-minute setback with Cargolux represents a significant blow for the company trying to regain confidence with increasingly frustrated customers.

No new timetable has been set for first delivery and it is currently unknown whether this is a technicality that will take days to resolve or something that may take weeks or months.


Airlines Still Adding New Fares as Costs Stay High

Over the weekend US Airways raised same-day fares anywhere from $6 to $10 round trip causing other airlines to follow suit according to USA Today.

The increase was the tenth rate hike this season as airlines have tried to stay profitable in the face of high fuel prices and an abnormal increase in weather-related cancellations this year.

Airlines have tried to increase fares every few weeks since the start of the year but they don’t always stick. The key this time was getting low-cost carriers on board.

But it was Southwest’s decision to match the increase that helped ensure it would stick — unlike eight other times airlines sought to raise fares this year, says Jamie Baker, managing director and U.S. airline equity analyst for JPMorgan Chase.

“Had Southwest not joined,” he says, “we are highly confident that the increase would have unraveled over the weekend.”

As the summer months, and the subsequent seasonal increase in fuel prices, winds down, it will be interesting to see whether airlines drop fares if fuel prices drop or if they will maintain higher-than-usual fares to make up for lost profits earlier in the year. For consumers there will likely be little breathing room as we are already just two months away from Thanksgiving and some of the busiest, and most expensive, months of the year.

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Boeing’s New 737 Dubbed ‘Max’

Boeing announced last week that it will re-engine its most popular commercial plane, the 737, making the new plane more energy efficient. The announcement concluded months of speculation over whether Boeing would re-engine the narrowbody plane or launch a brand new plane altogether.

Earlier in the year it appeared Boeing was planning on building a new plane from scratch with officials publicly acknowledging that was the plan. But with the missteps of the 787 hanging over the company’s head, the more conservative decision to simply re-engine the current 737 was too tempting. Boeing emphasized that while the plane is not a brand new design, it will take advantage of many new technologies that have developed over recent years.

We call it the 737 MAX because it optimizes everything we and our customers have learned about designing, building, maintaining and operating the world’s best single-aisle airplane.”

The 737 MAX will deliver big fuel savings that airlines will need to successfully compete in the future. Airlines will benefit from a 7 percent advantage in operating costs over future competing airplanes as a result of optimized CFM International LEAP-1B engines, more efficient structural design and lower maintenance requirements.

The 737 Max will compete with Airbus’ own re-engined A320, the A320neo which will launch in 2015. According to Reuters, Airbus’ sales chief Jim Leahy was quick to criticize Boeing’s new plane.

“Once again, Boeing is in denial,” Leahy told Reuters. “The re-engined 737 cannot possibly match the fuel efficiency and maintenance cost savings of the A320neo family. We’ll see the real world results in our order books.”

Boeing announced that it has received nearly 500 orders for the new plane which is expected to debut in 2017.


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Boeing 787 Cleared to Fly By FAA

More than eight years after the program was conceived, the FAA and Boeing announced on Friday that the FAA has approved production of the 787, meaning that airlines can begin receiving deliveries of the plane.

The program has seen numerous delays over the years, partly due to the innovative designs being implemented in the mostly-composite aircraft. But Friday’s announcement means that passengers will soon be flying in 787s to destinations around the world. With over 800 orders for the plane, it is sure to become a staple of medium to long-range international travel over the decades to come.

At an event at Boeing’s facility in Everett, Washington, Administrator Babbitt presented Boeing executives with two certificates for the design and production of the Boeing 787 Dreamliner with Rolls-Royce engines. The first, a Type Certificate, is for the FAA’s approval of the airplane’s design. The second, a Production Certificate, allows Boeing to manufacture the 787 following a rigorous review by FAA inspectors of Boeing’s quality system, production tooling, manufacturing processes and controls, inspection methods, and supplier control procedures.

“The Boeing 787 Dreamliner is an incredible technological achievement – one that sets a new standard for innovation,” said U.S. Transportation Secretary Ray LaHood. “The new engine technology is fuel-efficient and reduces noise, minimizing the impact on the environment. Those are key to meeting our NextGen goals.”

Next up for Boeing will be ramping up production lines on order to deliver as many 787s to customers as possible in a timely fashion. Some experts have predicted that given the numerous delays to the plane, Boeing may have to deliver over 1,000 787s before the line even becomes profitable, putting a lot of pressure on Boeing’s ability to streamline its production line.

First delivery to launch customer All Nippon Airways will occur on September 26th.

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Hurricane Irene Forces Over 8,000 Airline Cancellations

This time yesterday it was reported that nearly two thousand flights had been cancelled due to Hurricane Irene. That number has quadrupled over the last 24 hours to over 8,000 CBS News reports.

The cancellations are the result of Hurricane Irene which is currently traveling along the Eastern Seaboard, largely covering the most populated part of the country.

Some airports have remained open whereas others, such as all major airports in the New York City area, have stopped allowing incoming flights. At the airports that are open, few flights are taking place as airlines have cancelled nearly all flights in the Mid-Atlantic and Northeast.

Those who are flying this weekend anywhere in the country should check the status of their flight first as cancellations can have peripheral effects due to planes not being able to make it to their destinations.

This story is still developing and I will update as necessary over the next few days.

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Hurricane Irene Forces Thousands of Cancellations, More Expected

With Hurricane Irene threatening tens of millions of people along the Eastern Seaboard, airlines have begun preemptively canceling flights, particularly in the Northeast.

According to The Wall Street Journal, 2,400 flights have already been cancelled through Monday with thousands more still possible as Hurricane Irene draws closer and its exact path becomes clear.

At John F Kennedy Airport in New York, all incoming International flights after noon on Saturday have been canceled. Because of its location on the water, JFK is especially vulnerable as a strong storm surge could cause widespread flooding at the airport.

Airlines have waived fees for many travelers with tickets for this weekend if they change their flights to another date. Check with your particular airline if you are flying anywhere from South Carolina to New England over the next few days.

I will update airline and airport information as it becomes available (and if my power in Philadelphia doesn’t go out)


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New 747 Gains FAA Approval

Boeing announced on Monday that the cargo version of its newest 747, the 747-8, has been approved by both the FAA and European equivalent, the EASA, meaning the plane can now be delivered to launch customer Cargolux in the next few weeks.

The 747-8 cargo variant precedes the 747-8 Intercontinental, the customer version which is currently undergoing testing. The launch is a welcoming sign for Boeing, a company that has struggled to meet delivery deadlines with its planes over the past few years with the 747 and 787.

“This is an incredible day,” said Elizabeth Lund, vice president and general manager of the 747 program, after accepting the certificates at a private ceremony. “The people on the 747 program have worked long and hard and this has been a long journey and it really sort of culminates today when our airplane is finally certified.”

“Over the last several years, this team has overcome challenge after challenge. Through their hard work and dedication, they have ensured that the 747, the Queen of the Skies, will fly for decades to come,” said Jim Albaugh, president and CEO, Boeing Commercial Airplanes.

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