Economic review

Boeing gets set to top rival Airbus with record 763 jet deliveries in 2017

2018-01-12 13:39:00 (Beijing Time)         Global Times/Agencies

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Boeing Co said on Tuesday that it delivered an industry record of 763 jetliners in 2017, likely beating European rival Airbus SE to retain the title of the world's largest plane manufacturer.

Boeing also booked 912 net new aircraft orders worth $134.8 billion at list prices last year, compared with 668 worth about $94 billion in 2016.

Airbus was on track last month to rack up more than 1,000 gross new orders for the year, excluding cancelations, compared with the 1,053 gross orders Boeing announced on Tuesday.

The tallies confer more than just bragging rights; they show the companies' abilities to run factories smoothly, make sales and generate profits.

Industry sources say Airbus, which will report its 2017 orders and deliveries on Monday, met its target of delivering more than 700 jetliners, despite problems with Pratt & Whitney Geared Turbofan engines.

The European firm cut its forecast from more than 720 jets in October due to delays in engine deliveries. As such, Airbus' total is unlikely to match Boeing's.

Boeing's orders and deliveries confirmed the plane maker's ability to hit rising production rates. This could mean an additional "$350 million in revenues versus our forecast," said Sheila Kahyaoglu, an analyst at Jefferies Group, a New York-based investment banking company.

Boeing also said airlines will likely need more aircraft in 2018, keeping production rates rising.

The company expects airlines to boost passenger capacity by 5.5 percent to 6 percent this year, Randy Tinseth, Boeing vice president of marketing, said during a conference call.

With airlines already flying very full airplanes, more aircraft will be needed.

"We're expecting growth to be driven by new deliveries, not by more capability out of the existing fleet," he said.

Price targets for Boeing's stock are rising.

The median is now $310 a share, up from $293.50 in October. Some targets are even as high as $380. Still, 12 analysts rate it as a "hold" compared to 13 with "buy" or "strong buy" ratings.

Meanwhile, air cargo traffic is rising, but a sustained gain could arrive too late to rescue Boeing's 747 aircraft.

Boeing has 12 backlogged orders for 747s, worth about two years of production.

Tinseth said air cargo companies are interested, however.

"The question is, when will they be in a position to buy?" he said. "They want to make sure that [demand is] sustained."