Airbus beats Boeing with 1,055 plane orders

PARIS (Reuters) - Airbus outsold Boeing Co. in 2005 with 1,055 net orders, it said on Tuesday, capping a record year for both planemakers marked by fierce price competition and strong demand from Asian and budget airlines.

However, Boeing still claimed the lion's share in the premium end of the market, and Airbus had to concede defeat to its fierce U.S. rival in the overall value of jets sold.

Airbus almost tripled the 366 net orders it had captured in 2004 and beat Boeing's tally of 1,002, despite many analysts' expectations that the European group risked losing its lead for the first time since 2000.

At the end of November Airbus had just 678 orders for the year to date, trailing Boeing's tally of 827.

At its annual news conference on Tuesday Airbus said it also led Boeing in deliveries for a third consecutive year, with 378 planes leaving its assembly lines compared with 320 in 2004. Boeing had 290 deliveries after a strike trimmed higher expectations.

Deliveries make up the bulk of Airbus revenues, which rose 10 percent to 22.3 billion euros ($27.1 billion), up from 20.2 billion in 2004. Airbus is 80-percent owned by aerospace group EADS with the rest owned by BAE Systems.

The Airbus order backlog rose to 2,177 aircraft worth $220.3 billion from 1,500 at the end of 2004.

Airbus Chief Executive Gustav Humbert told reporters the return on sales came in at a "ballpark" level of 10 percent, compared with 9 percent in 2004. In 2006, he saw the margin staying beyond 10 percent with continued cost cutting efforts.

"We saw very aggressive pricing from Boeing in 2005 but you can see we could match it and improve profitability," Humbert said. "There was a big pressure on prices in 2005."

EADS shares dipped slightly after the publication of the figures, with the stock down 0.25 percent at 31.37 euros by 1025

GMT.

M.M. Warburg & Co analyst Nils Machemehl said many investors had already factored in a strong set of sales.

"The numbers were strong. The margin of 10 percent was in line, the revenues were stronger than forecast and the 2006 outlook is no surprise," he said, keeping a "buy" rating on

EADS.

BOEING'S LARGE JETS PROVE HARD TO BEAT

Airbus claimed victory over Boeing in orders, deliveries and backlog, with a 51 percent share of net orders for jets able to seat at least 100 passengers and 55 percent of the order book.

However, Airbus figures showed that its orders were mainly driven by sales of cheaper, single-aisle models to budget airlines, while it lost several deals for larger jets to Boeing.

The U.S. planemaker had a record year for its twin-engined long-haul 777 and trumped Airbus's planned mid-sized A350 with strong sales of its new 787 Dreamliner.

Airbus said it had 87 firm orders and another 85 commitments for the newly launched A350, whereas Boeing said earlier this month it had sold 235 of the 787s last year.

The mix of larger planes in Airbus's gross orders intake fell to 17 percent from 25 percent, according to Reuters calculations.

Humbert said he wanted to catch up with Boeing in long-range and wide-bodied jets within two years: "We have to take the next two years to really come up to the same 50-50 level of orders of long-range and wide-bodied aircraft."

Humbert also conceded defeat to Boeing in terms of the overall value of jets sold.

He said Airbus's gross orders of 1,111 planes (before cancellations) were worth $95.9 billion and estimated Boeing had taken 55 percent of the total market by value.

He said it was too early, however, to comment on speculation that Airbus would be forced to redesign its slow-selling four-engined A340 to counter the 777's success and that no decisions had been taken.

EADS's shares trade at 15 times forecast 2006 earnings. Boeing, with a bigger chunk of defense income, trades at 21 times, according to Reuters data.

Humbert reiterated a target of at least 400 deliveries in 2006 and an increase in production of single-aisle jets from 28.5 a month now to 30 a month in 2006 and 32 a month in 2007.