Airbus to Surpass Boeing as World’s Largest Plane Maker

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Airbus

With all the problems currently facing Boeing at the moment, it’s not surprising to hear that the world’s largest airplane manufacturer is about to be dethroned.

Airbus (NASDAQ: EADSY) is on the cusp of taking the spot from Boeing (NYSE: BA) after seven years as its jetliner deliveries declined by over 33 percent during the first half of 2019 thanks to the ongoing 737 MAX fiasco.



For the past four months, the U.S. aerospace giant best-selling MAX planes have been barred by safety regulators, which is far longer than Boeing and its shareholders expected. With two disastrous plane crashes to the model’s name, consumers have expressed worries about getting on the MAX plan again.

As a result, Boeing lost around $50 billion in market cap since March. At the same time, over 150 undelivered MAX planes that airlines aren’t interested in buying anymore are parked at sites around the country, adding to the 380 MAXs already grounded by airlines.

For the third straight month in a row, Boeing reported on Tuesday that they had no new orders of MAX aircraft as analysts expect the planes to remain grounded until September if not longer. This also means Boeing will be sitting on a huge backlog of planes that won’t be delivered nor paid for until 2020.

In comparison to the 239 planes delivered by Boeing in the first half of 2019 (down from the 378 of last year), Airbus shipped 389 planes during the same time period despite a number of production problems. Additionally, the European airplane maker already announced that they were moving forward with their A320neo, a direct rival to Boeing’s MAX airliner.

Recently, Boeing came under fire when it came out that the company had been using poorly paid, contract software engineers that were paid as little $9 per hour.

With the previous MAX crashes having been attributed to software glitches, the fact that Boeing was laying off their most experienced engineers under the assumption that these less-experienced staff could handle the project has backfired, with many calling out Boeing for treating their engineers like a commodity.

Analysts are expecting Boeing to burn this its cash reserves this year as well as get into more debt. With their second-quarter earnings coming up on July 24th, experts will be paying close attention to the company’s figures, since it will include the cash outflow impact from the MAX grounding.

Shares of Boeing stayed relatively the same on Tuesday, inching up around 0.5 percent. After taking a substantial hit in March, the company’s stock price has hovered between the $300-$350 price range.



Airbus, on the other hand, increased by 1.4 percent and has continued to rise steadily over the past few months as investor sentiments move towards the European airplane maker.

Airbus Company Profile

Airbus is the world’s second- largest aerospace and defense firm. The company manufactures commercial aircraft, military and commercial helicopters, fighter and transport aircraft, and satellites and space launch vehicles.

Airbus’ headquarters are in Toulouse, France. In 2018, the company generated revenue of EUR 63.7 billion and adjusted operating profit (EBIT) of EUR 5.8 billion. – Warrior Trading News

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