Boeing remains top planemaker in 2013, loses on race for orders

Mon Jan 6, 2014 9:53pm GMT

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013.

Credit: Reuters/Jim Young

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(Reuters) - Boeing remained the world largest plane maker in 2013, but industry sources said it lost the race to log new orders to rival Airbus.

Boeing Co (BA.N) said on Monday that it delivered a record 648 jetliners in 2013, topping Airbus (AIR.PA) for the second year in a row and beating 2012 deliveries by 7.8 percent.

Airbus topped Boeing in new orders, however, according to two industry sources. Boeing said jetliner gross orders totalled 1,531 in 2013, a record, and net orders reached 1,355.

Airbus sales exceeded both of those numbers, the sources said on condition of anonymity, without giving further details.

Based on announcements of 98 orders since the end of November, Airbus has booked at least 1,471 gross orders and 1,412 net orders. The European planemaker typically unveils new orders with its final figures for the year, due January 13.

Investors keep close tabs on deliveries, since plane makers book the bulk of the revenue from airplane sales when the aircraft are handed over to customers.

But orders have had a growing impact on share prices in the past two years, as the world's dominant plane makers fought for sales of new fuel-efficient models. Plane orders also can produce large swings in company cash balances, because airlines make down payments when orders are placed.

Boeing's delivery tally topped its forecast of up to 645 jets for the year and was up from 601 last year. The tally also exceeded deliveries by rival Airbus (AIR.PA), one of the sources said.

Airbus delivered more than 625 aircraft in 2013, beating its target of up to 620 but lagging Boeing's total of 648 deliveries, the source said.

RISING PRODUCTION

Boeing said it delivered 440 of its 737 single-aisle planes, 98 of its 777 widebody planes and 65 of its carbon-composite 787 Dreamliners, which are now in use with 16 customers.

The Chicago-based aerospace and defence company also delivered 24 of its 747 jumbo jets, and 21 of its 767 jets.

Boeing Commercial Airplanes Chief Executive Ray Conner praised "solid execution" as factories increased production rates last year.

"We delivered more advanced, fuel-efficient airplanes to our customers than ever before, and it's a great example of what our team can accomplish," he said in a statement.

Boeing's shares were up 0.92 percent at $138.89 in afternoon trading on the New York Stock Exchange.

Boeing's production lead is likely to grow this year. The company plans to increase output of its top-selling 737 model to 42 a month in 2014 and to 47 a month by 2017. It makes 38 a month currently. Airbus, by contrast, has not announced plans to increase output of its rival A320 jet.

Boeing also said it would lift production of its 787 Dreamliner wide-body jet to 12 a month by 2016 and 14 a month by 2020, up from a target of 10 a month by the end of 2013.

However, orders are likely to slow, even as deliveries rise, said Peter Arment, an analyst at brokerage Sterne Agee.

"With delivery slots filling up, even at these elevated production rates, by nature we're going to see some tapering of the order book activity," Arment said.

Boeing and Airbus will focus on "leveraging and execution off these large backlogs" of orders, converting them to planes - and cash.

While some investors fear rising production will create an oversupply of aircraft, Arment said that's not a big worry.

"We still have some aging aircraft fleets in Asia and Europe that need to be replaced," he said, and that should prevent a glut.

Boeing also delivered 171 military aircraft and satellites, up 11 percent from 154 in 2012. Boeing in October said it will close its C-17 military transport plane production, which is producing a steady 10 planes a year, due to lack of orders.

The order book for fighters also is tapering, and analysts say this could force closure of those production lines later this decade unless Boeing lands new orders.

(Reporting by Alwyn Scott, Tim Hepher and Mridhula Raghavan; Editing by Meredith Mazzilli)