Boeing clearly had an excellent year. As Boeing’s Randy Tinseth noted in his blog: “Regardless of the final figures from Airbus next week, 2017 shaped up to be a better year than anyone could have predicted.” No argument. We were among those thinking the year would be gloomy. Here is our table using the latest Boeing O&D data.
As good a year as it was, there are some items worth noting:
- 737-700 (and MAX7) has not done well
- 737-800 (and MAX8) generated just over 40 deliveries per month, all from one FAL, which is amazing
- These models account for ~87% of all 737 deliveries
- 777-300ER has a good year in orders even if they were discounted
- 787 deliveries was a highlight
The Boeing numbers show that the 737 program generated 81% of orders and 71% of deliveries. The 737-800 and MAX8 accounted for most of this activity. The 737 program is heavily weighted to this one model size. Boeing continues not to break down the MAX model data in their numbers. Customers may be switching from the -800 to MAX8 and the book-to-bill on the 737 program reached its highest level in three years. The backlog at year-end was about nine years. That said, the 737 program is MAX8 heavy and looking ahead, it is the only 737 model giving Airbus any serious competition.
The 787 program generated 10% of orders and 17% of deliveries. It is clear that having two FALs working on this program and the acceleration of work was a very good idea. With a backlog of ~658, at current delivery rates, these plants have ~5 years of work. The market continues to switch to the larger models which are more capable and also more profitable for Boeing. The -10 is going to add considerably to the attraction of the 787 family.
To provide some perspective on the 2017 numbers we created some charts. First, let’s look at order history. Note that we did not include the data listed as “Unidentified” and the sheer size of this could move the data significantly. At the same time last year we thought that 2016 was not going to be the bottom and yet it was. The Middle East and Asia were surprisingly robust.
Boeing’s orders mainly come from three regions: Asia, Europe, and North America. The Middle East market is a recent phenomenon as the next chart illustrates.
These charts are very busy. The next chart goes in five-year increments through 2015 to make it easier to see. Using Asia as an example, we can see that the market is concentrated. China has long been a Boeing favorite. And 2017 saw Boeing’s best Asian customers in the order book; Singapore, Japan, and China.
There is a high concentration in the order book as the next chart illustrates. Once again, using Asia as the example. Asia accounts for 27% of orders and three customers account for 79% of those orders.
Europe accounts for 10% of orders and of those, three customers account for 68%. North America accounts for 21% of orders and the top three customers account for 55% of those orders. The Middle East accounted for 29% of orders and of those, 87% came from one customer.
Next looking at deliveries we see the following. Boeing’s ability to increase its deliveries is impressive.
To provide a similar perspective to the order chart above, here is the delivery history. As we can see, there is some concentration here too. Note the steady rise in Asian deliveries. As was the case with orders there are three main players and the growing Middle East.
This time using Europe as an example, we can see there is concentration also. Ireland was the big market last year and this was driven by the leasing companies and their aircraft end up all over the globe. We can see that Turkey is growing in importance.
Europe accounted for 21% of deliveries with the top three customers accounting for 58% of those deliveries. Asia accounted for 33% and the top three customers accounted for 31% of those deliveries. North America accounted for 33% and the top three customers accounted for 44% of those deliveries.
In summary, the Boeing numbers are impressive. Any stumbles by a key customer or in a significant market could upset future numbers. For example, as has been stated numerous times, if the ME3 stumble then the 777X program, which accounts for 72% of the orders, could be severely impacted.
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