Boeing tops Airbus in jet value

Boeing has finally reclaimed its title as the world's No. 1 airplane maker due to the stark weakness of Airbus in the wide-body jet market, figures released Wednesday show.

Though Airbus built 36 more airplanes in 2006, Boeing built bigger and more valuable ones.

The bottom line: Based on independent valuations of actual aircraft selling prices, Boeing's factories in the Puget Sound region churned out jets worth about $25 billion last year compared with $23 billion out of Airbus assembly plants in Toulouse, France.

Airbus on Wednesday released its figures for 2006, confirming the expected Boeing win in jet orders for the first time since 2000.

More of a surprise was that for the first time since 2003, Boeing also took the lead in the value of aircraft delivered.

"I'm a financial guy," said longtime industry consultant Wolfgang Demisch. "If I see somebody generating a bigger dollar value, I view that as leadership."

There are many ways to measure supremacy in the commercial-airplane business: Orders won. Jets delivered. Money raked in.

To analyze the 2006 data, The Seattle Times compiled deliveries and net orders, model by model, for both manufacturers. Values were calculated based both on list prices and on estimates from aircraft-valuation firm Avitas of actual prices paid after discounts.

The outcome: Last year, Boeing had higher sales than Airbus and generated more revenue from aircraft production.

Separate data provided by the Teal Group, an industry consulting firm, shows that for the first time in five years Boeing also achieved a more valuable order backlog.

Boeing's marketing vice president, Randy Baseler, said the numbers reveal a Boeing advantage in the key wide-body segment that Airbus will take years to claw back.

"It's really the power of the wide-bodies," said Baseler. "Eventually it's conceivable [Airbus] could come back. ... But it's certainly not going to be in the next five to eight years."

Baseler said winning market share alone is not enough. "You can go after market share and buy your way through that."

Boeing's wide-body dominance came through solid, strategic decisions, Baseler said.

He credited Boeing's launch of long-range twin-engine wide-bodies while Airbus focused on, then messed up, building the A380 superjumbo.

In 2006, Boeing delivered 79 large wide-body jets from Everett — 777s and 747s.

In comparable-size jets, Airbus delivered only 24 A340s.

That huge gap in the most expensive aircraft more than made up for the 32 extra narrow-bodies Toulouse pumped out compared with Renton.

Demisch said the industry rule of thumb is that wide-body jets are priced at 60 percent more per seat. And, of course, they have many more seats.

"You are buying more airplane," the consultant said. "And you pay for it."

To win back lost ground, Airbus must fix its A380 production problems and begin production of its A350 rival to the 787. But A350 delivery isn't scheduled until 2013.

"They've got a big challenge ahead in the next five years," Baseler said. "They are going to go through a rough patch."

He suggested that Airbus, to try to hold onto customers, has been forced into short-term buying of market share.

Announcing results Wednesday, Airbus Chief Executive Louis Gallois said that because of the A380 setbacks, Airbus will post an unspecified loss for 2006, its first since becoming a public company.

"The A380 industrial delays ... were really a major shock for Airbus," Gallois said. "We at Airbus are taking all measures now to get the issue under control and to ensure that something like that never happens again."

Airbus spokeswoman Maryanne Greczyn, in an e-mail response to The Seattle Times analysis of the delivery values, declined to comment directly on the figures but said Airbus still expects the market will eventually settle into a 50-50 division, on average, between the two manufacturers.

"One year does not a trend make," said Greczyn. "This business is about decades."

Boeing had given details of its 2006 orders and deliveries earlier this month. Only Wednesday was it possible to crunch the numbers and make a direct final comparison of results.

Richard Aboulafia, an industry analyst with the Teal Group, estimated the total Boeing backlog at $194 billion, compared with Airbus' $165 billion (using estimated real aircraft prices, not list prices).

That would be the first time since 2001 that orders on Boeing's books have been worth more than Airbus'.

"That's a sea change, a seminal event," Aboulafia said.

In sales figures, Boeing blew Airbus away both in jets sold and in the value of those jets.

Boeing won a total of 1,044 net orders, compared with Airbus' 790.

That gave Boeing a 57 percent market share by units. But because Boeing's orders were more heavily skewed toward the valuable wide-body aircraft, Boeing took 63 percent market share by value.

Boeing's net orders were worth $115 billion at list prices, or about $71 billion after standard discounts, based on estimates by Avitas.

Airbus' net orders were worth $70 billion at list prices, or about $42 billion after standard discounts, based on Avitas estimates.

On the production side, Boeing's win was slimmer.

Based on list prices, which are largely fictional since huge discounts are standard, Boeing won by a whisker, delivering jets worth $40 billion compared with $39.6 billion for Airbus.

Based on actual purchase price estimates from Avitas, the gap was decisive. Boeing's $25 billion revenue gave it a 51 percent share of the total $48 billion taken in revenue.

Aboulafia said Airbus first overtook Boeing in the value of total jet deliveries in 2004. Only one more statistic remains to be reclaimed: absolute number of aircraft produced.

"It won't be long," said Boeing's Baseler.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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