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Iran Deals the Difference in Plane Battle Between Airbus and Boeing


01/14/2017


Iran Deals the Difference in Plane Battle Between Airbus and Boeing
In the course of the past two decades, it was usually clear, between planemakers Airbus and Boeing, who had bragging rights in the fiercely competitive $120 billion annual jet market and the planemakers ave traded the crown in the annual orders race.
 
And this week beating Boeing's tally of 668 for the year released a week ago, Airbus retained the top spot when it said it had recorded a total of 731 net orders for 2016.
 
Iran, emerging from decades of sanctions to place billions of dollars of new orders, stood out as the unusual kingmaker between the two Western giants. Its comeback carries unusual weight because of fragile demand elsewhere.
 
While Airbus’ American arch-rival did not include the 80 aircraft it sold to Tran, Airbus included all but two of the 100 aircraft it sold to the country last year.
 
It is unclear what criteria were used by each company in making their decisions and why Airbus formally reported Iranian orders while Boeing did not.
 
And while Boeing's planes will be delivered from 2018, Iran took delivery of its first Airbus jet on Wednesday and hence Airbus is further ahead in the sales process.
 
Neither planemaker gave any immediate comment when contacted by the media.
 
With regards to why Airbus was able to book all of their Iranian orders, there was some bemusement at the U.S. planemaker a source close to Boeing was quite din the media as saying. The company's year-end numbers had been strictly audited, Airbus sources, who declined to be named, said.
 
The status of the U.S. export licenses needed by both companies due to their heavy reliance on U.S. parts is partly responsible for decisions on whether to formally report such orders in annual tallies, analysts say.
 
While only some of them cover the whole delivery period running until 2028, both big jetmakers have received U.S. export licenses for sales to Iran, people close to the deals say. For part of their orders, both companies must apply for extensions. Both the companies are under the same contractual conditions, industry sources say.
 
In the face of U.S. Republican political opposition, if Boeing can use its rival's presence in the country to make the case for its own deal to go through, it may ultimately benefit from lagging Airbus in the Iranian sales process even though Boeing lost the headline order battle, analysts say.
 
The international nuclear deal that led to the lifting of sanctions on Iran was criticized by President-elect Donald Trump during his election campaign.
 
With their combined new orders falling below deliveries for the first time since 2009, the Iranian orders offer valuable respite from a slowdown in demand for both planemakers.
 
For 2016, a book-to-bill ratio of 0.89 was posted by Boeing. Company data shows that with 748 orders and just as many deliveries, this would be at exactly 1 if the Iranian deal were included. Airbus would fall below that threshold without the Iran order.
 
After a decade of mostly rampant growth, coinciding with growing indicators that the aerospace cycle is weakening, analysts said such margins show how relatively thin orders have become.
 
(Source:www.reuters.com)