Boeing Expects Its Next-Generation Planes Will Drive Sales Surge

John Wojick, senior vice president of global sales and marketing at Boeing Commercial Airplanes, told Reuters that:

[H]e was confident of selling enough of the current 777-300ER, which is sold out until 2017, to fill the gap until a new revamped 777X version enters service in 2020, without having to cut production.

And:

Boeing had also sold enough of the existing 737NG models to ensure a smooth transition to the new 737 MAX.

Some of this success depends on poor decisions, or a deep slumber, at rival Airbus.

Airbus is hardly sleeping. It sold 1,619 planes in 2013 and claimed this bested Boeing by that measure. According to The Guardian:

The president and chief executive, Fabrice Bregier, said that with a total of 5,559 outstanding orders, or about nine years of production at current rates, Airbus had an extremely healthy backlog before what would be a significant year.

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Unless China’s effort to build its own commercial planes is a success, the industry is a zero-sum game. Large carriers order virtually all of their planes from either Airbus or Boeing. Among the points of competition is price. That, in and of itself, makes setting high margins difficult. The fact that both Airbus and Boeing are in the process of producing and selling the planes that they think will carry their companies through the next several decades makes the profit proposition even more difficult. Boeing may be right about its future success. However, it is not so clear at what price it will buy market share.

So, the two companies go back and forth in the bragging contest. The most recent salvo is from Boeing. It should not be too many weeks until it is Airbus’s turn. In the end, however, sales will speak for themselves.