Boeing Expects Orders to Exceed Deliveries this Year

 - October 20, 2010, 9:02 AM

Boeing expects its commercial aircraft book-to-bill ratio to exceed one by year-end, following what CEO Jim McNerney characterized as a “strong” third quarter that yielded net firm orders for 221 airplanes worth more than $12 billion, compared with a net order count of 79 during the corresponding period last year. Meanwhile, Boeing Commercial Airplanes delivered 124 airplanes during the quarter, compared with 113 a year earlier. That 10-percent rise in deliveries, along with an increase in commercial aviation services volume, resulted in an 11-percent increase in quarterly revenues, to $8.749 billion.

Projecting deliveries of 460 airplanes by the end of the year, Boeing has already collected net orders for 382 airplanes through October 12. It finished last year with a net order count of just 142 airplanes.
           
“The orders came in stronger this year than we anticipated,” said McNerney. “Based on discussions we’re having with customers now, while it’s hard to predict exactly because it’s somewhat dependent on the economic situation, the pipeline that we have right now would suggest a continuation of ‘strongish’ orders—not going back to the days of the mid-2000s…but sort of in line with a slow, steady kind of recovery.”
           
While speaking during today’s third-quarter earnings call, McNerney addressed the company’s latest thinking on the future of the 737 program. The Boeing chief executive continued to sound somewhat ambivalent on the prospects of a re-engining, particularly given the target date of 2020 for introduction of an all-new narrowbody. “The first order of business is getting these two programs [the 787 and 747-8] done,” said McNerney. “As far as the narrowbody, we see a new airplane opportunity out in the 2020 range and, therefore, are continuing to question the necessity for a re-engine in the meantime…It is conceivable we would conclude a re-engining makes sense, but with a new airplane in the 2020 time frame, it’s not clear that it would.”
              
McNerney also reported that Rolls-Royce has expressed confidence modifications to the Trent 1000 following an uncontained fan failure of a test engine in August would not jeopardize Boeing’s latest certification schedule for the 787. “It is not going to require that they recertify the engine—just submit some data to, in essence, sustain certification,” he said. “After that, it’s a matter of grinding through the data, analyzing the data as it comes off our testing. Every day there’s less risk in front of us and more risk behind us.”

Boeing still expects certification of the 787 by the middle of next year’s first quarter. The program’s six prototypes have flown more than 2,000 hours during some 650 flights. The 747-8, now scheduled for certification some time around mid-year, has logged more than 1,100 hours during some 400 flights.