January 3, 2019 / 2:38 PM / 5 months ago

Airbus bags new orders as delivery target doubts grow

PARIS (Reuters) - Airbus narrowed a sales gap against U.S. rival Boeing by finalising orders for 120 of the former Bombardier CSeries jet, but shares in Europe’s top planemaker fell as doubts surfaced over a target for overall 2018 deliveries.

FILE PHOTO: An Airbus A220-300 aircraft flies during its unveiling in Colomiers near Toulouse, France, July 10, 2018. Airbus A220 is the new brand for the small CSeries passenger jet acquired from Canada's Bombardier. REUTERS/Regis Duvignau/File Photo

Airbus, which took over the loss-making CSeries last July and rebranded it the A220, said on Thursday it had finalised deals to sell 60 each of the jets to U.S.-based JetBlue and to Moxy, a U.S. start-up backed by JetBlue founder David Neeleman.

But shares in the European company fell as Airbus prepared a keenly awaited delivery tally for overall deliveries in 2018. In late trading they were down 3.6 percent.

Reuters earlier reported growing doubts over whether Airbus had achieved a 2018 target of 800 deliveries, or 782 without counting the Canadian A220 jets.

An industry source familiar with the matter said it was “more than likely” Airbus had missed the target by a handful of jets, marking the first time it has done so since it was reshaped through European mergers in 2000.

An Airbus spokesman declined to comment.

Deliveries are closely watched by investors since they mark the point at which most cash and operating profit are generated.

Planemakers worldwide have been struggling with supplier problems in the past 12 months and Airbus has faced some production snags and quality problems, though any shortfall in deliveries is not expected to have a significant profit impact.

Thursday’s U.S. deals mark the first formal orders for the 110-130-seat A220 since Airbus took majority control of the Montreal-based programme with Bombardier and Quebec as partners.

That realignment sets the stage for a broader confrontation with Boeing, which last month closed a deal to take over 80 percent of the commercial unit of Bombardier’s competitor Embraer, subject to Brazilian government approval.

For 2018, most attention is on the core sales battle between the transatlantic plane giants, with Boeing so far in the lead.

Airbus ended November with 35 percent of net sales in the main jetliner market against its U.S. rival after 11 months overshadowed by management changes and delivery delays.

Since then it has picked up speed with formal deals for 220 aircraft, including a 100-plane order from Irish lessor Avolon, leaving it 90 short of Boeing’s end-November total of 690 jets.

On a like-for-like basis, excluding the former CSeries model, Airbus has reached a total of 480 net sales for the year against Boeing’s most recent tally of 690 for a market share of 41 percent, based on orders announced since November.

Airbus plans to give full-year figures on Jan. 11. Both companies often pull in last-minute deals to lift annual totals, with announcements delayed until early the following year.

Reporting by Tim Hepher; Editing by Mark Potter

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