“The price of greatness is responsibility.”
“Winston Churchill”
DER SPIEGEL By Maria Marquart01/03/2013
Strong sales of its 787 Dreamliner pushed Boeing ahead of European rival Airbus in 2012.
For the first time in a decade, Boeing has surpassed Airbus in deliveries of passenger jets. Experts blame strategic errors and the influence of politics at the US planemaker’s European competitor.
At the last Farnborough Air Show in Britain in July, Boeing came up with a unique idea. For almost 30 years, the company had always left its passenger planes on the ground at major air events where industry representatives meet. At Farnborough, though, a Boeing 787 with Qatar Airways‘ livery droned over spectators’ heads. The performance jibed nicely with Boeing’s overall performance, and the company stole the show from Airbus, securing billions of dollars worth of orders.
In fact, 2012 went so well for Boeing that the American company has now surged ahead of its European rival Airbus in deliveries. According to analysts’ calculations, Boeing now carries the prestigious title of being the world’s largest deliverer of passenger jets. The reason for the success is the 787, or Dreamliner, which had been plagued for years withdevelopment and production problems.
With its high share of carbon fiber, particularly in the tail, the 787 was meant to revolutionize aircraft construction. But the first Dreamliners were delivered in 2011, after a three-year delay. Then engine trouble and loose parts on the tail resulted in negative headlines for the company. In December 2012, the American air safety regulatory agency, the FAA, ordered that all US Dreamliners be inspected for fuel leaks.
Now it appears that Boeing has ironed out the initial glitches in its Dreamliner program, though. Between July and September 2012 alone, the company managed to increase its production capacity to deliver 12 of the aircraft. “Boeing has resolved most of the problems it was having with the Dreamliner,” said Heinrich Grossbongardt, an independent German aviation expert, and now the company is working hard to fulfill its long list of orders. Boeing has also increased production capacity on its mid-haul 737 jets.
Boeing Also Ahead with Orders
Counting all of its models, Boeing delivered 537 aircraft to customers between January and the end of November, compared to only 516 at Airbus, meaning that the Chicago-based company surpassed its European rival for the first time since 2002. A decade ago, Airbus caught up with his rival and had secured the slot at the helm each year since. In 2011, for example, Airbus delivered 534 jets to customers, compared to Boeing’s 477.
But now the American company has caught up — with Boeing also appearing to pass up Airbus in the number of orders it booked in 2012. By Dec. 18, Boeing had recorded 1,115 orders compared to just 585 at Airbus through the end of November.
Aviation analyst Grossbongardt blames strategic errors at Airbus for the company’s decline in orders. The European planemaker has concentrated in recent years largely on the A380 super jumbo jet. The company didn’t receive a single order for the A380 at Farnsborough, though. Officials at Airbus believe problems with hairline cracks in the aircraft’s wings are leading airlines to hold back on purchases. However, sales chief John Leahy has admitted that the market for large aircraft has also weakened.
In contrast to Airbus, Boeing has been considerably more cautious in its assessment of the market for widebody aircraft. The US company did bring to market a pepped up new version of the classic 747 jumbo jet, which has been rechristened the 747-8, but its main focus has been on more flexible models. Grossbongardt argues that this strategy is now paying off. The Boeing 777 has been a major hit in terms of sales, and last year the company surpassed the 1,000 mark for deliveries of the aircraft.
“When it comes to two-engine planes, Boeing has steered ahead of Airbus with the 777,” Grossbongardt said. With nearly 400 seats, it offers airlines greater capacity and large maximum range with the lower operating costs of a two-engine plane. “It allows airlines to be much more flexible in planning because the advantages of jumbo jets are only felt when they are totally full,” Grossbongardt said, explaining the secret of the Boeing model’s success.
‘A Lot of Testosterone at Play’
Airbus has been very successful with its A320 family of short-haul jets, but they are much smaller than the 777. Now the Europeans want to better compete in the twin-engine, widebody market with the new A350, which will be built using very light materials. But the new long-range jet has been delayed and the first delivery is not expected until 2014. Grossbongardt said this means Boeing will likely be able to maintain its leading edge until the end of the decade.
But the fact that executives at Airbus concentrated so myopically on the A380 jumbo jet was also a product of politics at parent company EADS, where the French and German governments hold considerable sway. “There was a lot of testosterone at play in the conception of the A380,” Grossbongardt said. “Politicians wanted to prove a point to the United States and show that the Europeans were capable of building the world’s largest aircraft.” Airbus succeeded in the latter, but the A380 so far hasn’t proven to be the best-seller many had hoped for.
Still, even if the title for world’s biggest aircraft deliverer has already been bestowed, 2012 marked an important strategic development for Airbus, Grossbongardt said. A restructuring of shareholdings at parent company EADS is expected to diminish the influence of Paris and Berlin on operations.
“In the future, decisions at EADS will have a greater entrepreneurial focus,” Grossbongardt said. And that will be necessary, too. Boeing is currently showing profits of between 9 and 10 percent of turnover, compared to earnings of just 2 percent at Airbus.
Grossbongardt predicts the aircraft manufacturer will catch up again in the passenger jet market, though. “It has been a head-to-head race between Boeing and Airbus and it will remain that way,” he said.
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial Investment Real Estate Broker in Arizona now for 15 years and I worked with banks and their commercial REO properties for 3 years. I am also a commercial Landspecialist in Phoenix and a Commercial Landspecialist in Arizona.
1.
WHETHER YOU LEASE OR OWN
NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.
In my opinion we are at or near the bottom of the cycle in Commercial Real Estate in Phoenix and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
2.
IF YOU OR ANYBODY YOU KNOW IS IN TROUBLE WITH YOUR BUSINESS, AS MANY AMERICANS ARE IN THE MOMENT, AND ARE ABOUT TO LOSE YOUR COMMERCIAL PROPERTY, PLEASE CONTACT ME. IF YOUR BANK IS BEHAVING BADLY I MAY BE ABLE TO HELP YOU GET OUT OF SOME OR MAYBE A LOT OF FUTURE HEADACHES.
3.
WAITING TO SELL YOUR LAND ? TIMES CHANGE / IT’S TIME
We barely could give land away the last few years, but times are changing. Even in those meager years, I sold more land across the state than most other brokers. Before the real estate crash I was a land specialist in Arizona with millions of dollars of transactions, but then I had to change and also sell other commercial investment properties, which was fun, but I am a Commercial Landspecialist in Arizonal, a Commercial Land Specialist in Phoenix and love to sell land, one acre to thousands of acres.
Since I was a Land Specialist in Arizona and a Land Speciaost in Phoenix many of my clients, Sellers and Buyers remember me and now they are calling me again, so this is the time to get back into land and none of my clients, including future clients, will miss out on getting their best deal.
Also, if you are up-side down on your land, like many Americans, and the lender is giving you a hard time, now is the time to put your land on the market. Lenders are making deals now with short sales. I have been working with banks for many years – I learned how to work with them.
If you have any questions about the 1 to 3 above, about Commercial Investment Properties in Phoenix or Commercial Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me 520-975-5207 (cell) 602-778-5110 (office direct).
Thank You
Walter
Walter Unger CCIM
Associate Broker
Kasten Long Commercial
2821 E. Camelback Road, Suite 600
Phoenix,AZ85016
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