Boeing announces its 2009 scorecard. Few goals – Suppliers Share Wrap
Boeing has finished 2009 with 142 net orders, the lowest number the manufacturer has received since 1994, when it booked 125 orders. Cancellations have been the cause of much of Boeing’s woes this year. Despite the low year-end orders figure, Boeing’s shares rose 4.1% yesterday, to finish at a 12-month high of USD62.20 per share.
121 cancellations in 2009 - 83 for B787s
Airlines actually ordered 263 aircraft from Boeing in 2009, but the net figure was pulled down by large numbers of aircraft cancellations, which totalled 121 for the year. The delayed B787, which flew for the first time in mid-Dec-2009, saw the most cancellations (83), dragging the total number of B787s on firm order at year-end down by 59 aircraft, to 851. Other types got off more lightly, with 19 B737 cancellations, 11 B777 cancellations, five B767 cancellations and three cancelled orders for the B747-8.
While airline ordering for the US manufacturer may be at a decade-and-a-half low, deliveries are returning to peak levels. Boeing delivered 481 aircraft in 2009, matching its production forecast of 480-485 aircraft. The figure is significantly higher than the 375 delivered in 2008, when production was upset late in the year by to a two-month strike by machinists.
Of Boeing’s deliveries, the B737 accounts for the lion's share, with 372 aircraft joining airline fleets worldwide. B777 deliveries totalled 88, while B767 and B747 deliveries continue to slow, with eight and 13 delivered respectively. See related report: Ryanair tops 2009 aircraft deliveries, with 54 new B737s, easyJet second, China Southern third
Boeing expects aircraft ordering to remain slow for the next few years, as the airline ordering cycle typically lags the economic recovery. Speaking to Bloomberg, Boeing’s VP of Marketing, Randy Tinseth, stated the company expects to see demand for new aircraft increase in 2012.
Even if the next few years are relatively bare for Boeing, its extensive order backlog ensures that it is still in a strong position. The manufacturer has 3,375 aircraft in its backlog (2,076 B737s, 281 B777s, 108 B747s and 851 B787s). This is expected to maintain robust production levels for its in-service range, and ramp-up production rates for the B787, the first of which is expected to go to All Nippon Airways some time in 4Q2010.
Boeing’s 2010 production targets are due to be announced alongside its year-end results, on 27-Jan-2010.
Driving trading in the leasing sector yesterday was the purchase of Allco Finance Group’s aviation leasing arm, Allco Aviation, to Hong Kong Aviation Company (HKAC), part of the Chinese HNA Group. HNA operates Hainan Airlines and three other smaller carriers, as well as holding numerous stakes in other Chinese airlines.
The sale of Allco leasing to HKAG was announced in May-2009, but legal disputes over Allco’s ownership rights and opposition from Allco’s lenders over HNA’s bid held up the deal. Allco controls approximately 60 aircraft, with orders for another 40.
Elsewhere, the impending finalisation of the merger between Aercap and Gensis Lease has sent their share prices soaring, with both companies trading up 7.6% yesterday. Another strongly performing lessor was Aerocentury, which saw its shares climb 4.2%.
Selected Aviation suppliers’ daily share price movements (% change): 07-Jan-2010