Airbus and Boeing orders sag as airlines sit, Bloomberg reports

Darren Wood
By Darren Wood September 6, 2019 10:32

Airbus and Boeing orders sag as airlines sit, Bloomberg reports

Bloomberg analysts George Ferguson and Francois Duflot have said that the book-to-bill ratios have been well below 1x for Airbus and Boeing in 2019, as originally expected. The analysts have warned that this is likely to continue.

Ferguson and Duflot went onto suggest that the Max grounding has probably taken some steam out of Boeing’s marketing efforts, but also said that Airbus isn’t gaining share.

With failing airlines such as Jet Airways, AirBerlin, Primera, Avianca and WoW, it has been suggested that this would be the reason as to why there has been a reduction in demand for new aircraft.

Airlines are likely to slow or cancel orders on challenged profitability. While margins have recently rebounded due to less capacity growth resulting from the Max grounding, once the model is cleared to fly the analysts expect profits, yields and margins to weaken.

Airlines are already attempting to cancel orders as they consider slowing capacity growth to improve yields. Relatively low oil prices don’t help the situation, making older aircraft more economical and therefore adding to global capacity. At higher fuel prices, many would have been parked by now.

Darren Wood
By Darren Wood September 6, 2019 10:32