Boeing, Airbus talk profits over orders in Paris

Airbus: Not another breaking Paris Air Show, not bad
Airbus: Not another breaking Paris Air Show, not bad   

With their order books packed and some airlines scheduled to wait well over five years for their planes, Airbus and Boeing are talking about converting that backlog into profits.

"We have a chance to make some real money," said Boeing Chairman and CEO Jim McNerney. "Volume is your friend when you're trying to make money. We have big fixed costs, we have record deliveries the industry has never seen. For a company that delivers as many airplanes as we delivered last year, and prospectively we'll deliver this year, volume is your friend."

Boeing's current backlog stands at 5,080 airplanes—an all-time high.


People walk amongst aircraft exhibited on the tarmac during the opening of the International Paris Airshow at Le Bourget on June 15, 2015.
Miguel Medina | AFP | Getty Images
People walk amongst aircraft exhibited on the tarmac during the opening of the International Paris Airshow at Le Bourget on June 15, 2015.

Even with deliveries expected to hit a record between 715 and 725 this year, Boeing knows it will be tough to book mammoth orders at this year's Paris Air Show as it has done at air shows in recent years.

One of its biggest deals expected this year is a commitment by Garuda Indonesia to order 30 787-9 and 30 737 MAX 8 airplanes. That order is noteworthy, but relatively small compared to deals announced in past years. However, it is an example of the more moderate pace of orders the industry leaders expect.

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"I'm guessing there might be somewhat fewer by the end of the year," said McNerney.

For Airbus, it is a similar story. Last year, the European planemaker racked up a staggering 1,456 orders. That followed 1,619 orders in 2013.

With those orders inflating its backlog, Airbus is unlikely to announce as many orders as it has at previous Paris Air Shows.

Monday, the company said Saudi Arabia Airlines would be the launch customer for the A330-300 regional variant airplane.

United Technologies at Paris Air Show
United Technologies at Paris Air Show   

"We have a huge order book so we believe that the trend of the market is still extremely positive," said Fabrice Bregier, CEO of Airbus.

Investors should have confidence Airbus and Boeing can keep their profit margins up as they expand production, according to Bregier.

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"We have better control of our supply chain," he said. "We know how to work together with them, to anticipate the issues. So, all and all, I am pretty confident that it will work."

Airbus will soon open its new assembly plant in Mobile, Alabama.

Starting next year, it will begin delivering A320 airplanes to customers around the world.

That plant, along with Boeing's plant in Charleston, South Carolina, and the Bombardier assembly line outside Montreal, are part of the push among airplane makers to expand production.