“I love Paris When it Sizzles,” Cole Porter
The Paris Air Show was a success for major airplane makers Airbus and The Boeing Company (NYSE:BA). At the show, the two companies reported more than $160 billion in orders.
The orders add to an already large backlog of planes, providing stable multi-year growth for the aerospace suppliers TransDigm Group Incorporated (NYSE:TDG), Hexcel Corporation (NYSE:HXL) and B/E Aerospace Inc (NASDAQ:BEAV).
A big show for new orders
Airbus and The Boeing Company (NYSE:BA) are always battling for orders at the high profile Paris and Farnborough Air shows, held in alternating years in France and the United Kingdom.
This year was no different. Airbus came out on top, notching deals for 466 planes worth more than $70 billion. In dollar terms, that just about matched the $72 billion sold at the 2011 Paris show.
At the 2013 show, Airbus orders were strongest from Asian operators, including Singapore Airlines, and U.S. operators, including United Airlines, who ordered 35 A350-1000s. Airbus took its A350XWB into the air for the first time above the show.
Boeing also had a strong showing. The company debut a 787-10 that can hold more passengers and inked agreements for 442 planes worth $66 billion. The Boeing Company (NYSE:BA)’s Paris orders brought its net 2013 orders to 692 planes. That’s a big showing compared to the 2011 Paris Air Show when Boeing reported orders worth $22 billion.
Overall, industry orders came in at roughly $170 billion at the Paris show.
The orders add to an already bulging backlog of planes
The new Airbus orders add to a backlog of 4,928 planes at the end of May. Boeing’s backlog exited this Spring north of 4,400.
That has both manufacturers working closely with suppliers to ramp capacity to fuel faster production. Both makers view capacity growth as inevitable in order to meet an expected doubling of passenger planes over the next two decades.
Airbus entered 2012 with plans to build 570 planes, following production of 534 in 2011, thanks to a ramping of monthly A320 production to 42 per month. By year end it had delivered 588 aircraft, exceeding its plans.
Over at The Boeing Company (NYSE:BA), the company delivered 601 planes last year and Boeing hopes to deliver even more this year as it increases 737 production from 38 a month to 42.
The swelling orders and ramping production schedule suggests aerospace suppliers are in for a multi-year run of stable revenue and profit growth.