Shocking news from Airbus, as they report only a single airline sale in May to an unknown private owner.
However, perhaps it’s not shocking at all. May is the last month right before the Paris Air Show, a colossal industry event that both Boeing and Airbus use as a platform to announce vast airline orders for hundreds of aircraft.
What was the order?
A single ACJ320neo corporate jetliner was sold to a private buyer.
“The resulting ACJ320neo can fly 25 passengers 6,000 nm/11,100 km or 13 hours – enabling routes such as London to Beijing or Cape Town and Moscow to Los Angeles – while the ACJ319neo can fly eight passengers 6,700 nm/12,500 km or 15 hours.” – Airbus Press Release
However, it is very likely that Airbus negotiated and locked in several large orders with airlines but wants to announce them at the Paris Air Show.
How do airlines order planes?
To better understand what is going on, let’s discuss how airlines actually order planes from companies like Airbus and Boeing.
It starts with an airline identifying a gap in their product offering, renewing their fleet or simply expanding to gain market share.
They will speak with Boeing and Airbus to discuss their needs, and in some cases, Boeing and Airbus will create a new aircraft for the airline.
Most airlines are also associated in some way with their national government, and thus after much negotiation needs to take their proposal to the government and have it approved. Every airline in China, Airbus and Boeing’s biggest market, has to have the strict green ticket of approval from the central government.
When it comes to actually paying for these aircraft, it is incredibly rare that an airline will pay in full for the total list price. For one, they will only pay around 50% of the list price for each aircraft, with additional discounts for large orders. Many airlines will also ‘buy’ the aircraft, sell it to a leasing company, whom will ‘rent’ the aircraft back to the airline and thus allow the airline to use the money to buy more aircraft!
Lastly, many of these orders are only Memorandums of Understandings… not real orders but just a gentleman’s agreement (although can sometimes be legally binding) for an order down the road. It is not uncommon for these MOUs to fall apart six months later.
How many orders did Airbus really get?
Now its a bit hard to know how many airlines have actually made an order with Airbus, but if we look at previous orders from last years Farnborough Airshow.
Airbus’s total order from the show was 60 A220-300s, 304 A320 family aircraft, 42 A330neos, and 25 A350s. There were no A380 orders and the main reason for the company to end up canceling the world’s largest commercial aircraft.
To put this in perspective, Airbus managed to get a total of 754 aircraft orders from the 2017 Paris airshow to the 2018 Farnborough Airshow. 398 of these orders were memorandum of understanding’s (signed documents of an intent to order) and 354 firm orders (deposits paid).
You can see a full summary of all of the Airbus orders with our coverage of last years show here.
How many orders do you think Airbus will get this year? Let us know in the comments!