Sobering numbers

Kelly was addressing media at Southwest’s results announcement where the airline followed up its first quarterly loss in 17 years with a second in the fourth quarter of 2008, although it maintained its record of full-year profitability with a US$178 million surplus that represented a massive 72.4% plunge from the US$645 million earned in 2007.

However 2009 looks ugly prompting the airline to announced for the first time that it will shrink capacity.

First-quarter seat capacity will be down 4.4% and overall for 2009 about 4%. Kelly told media that the airline will “continue to prune unproductive flights and this is a technique that is unprecedented for Southwest Airlines.”

While Southwest will take delivery of 13 737-700s this year it will return or retire 15 aircraft. Foe 2010 the airline will take 10 737NG instead of 22 and for 2011 20 instead of 32.

The Southwest numbers are indeed sobering for Airbus and Boeing and underscore this year will be all about minimizing cancellations rather than winning any overall sales tally battle.

The airline will “continue to prune unproductive flights and this is a technique that is unprecedented for Southwest Airlines.”

For the record Airbus booked 777 net aircraft orders for 2008, topping Boeing’s 662 net orders, but both suffered significant drops on the record 2007 levels of 1,341 and 1,413 respectively.

Airbus’ 2008 orders comprised 472 A320 family aircraft, 163 A350s, 138 A330s/A340s and nine A380s.

Airbus claimed it had a 54% market share for aircraft over 100 seats and called its 2008 performance “a remarkable success in a difficult year” that featured “volatile oil prices” and a “turbulent” global economy.

Airbus delivered 483 aircraft in 2008, 30 more than in 2007 and were made up of 386 A320 family aircraft, 85 A330s/A340s and 12 A380s.

Backlog tops 3,715 aircraft made up of 2,598 A320 family aircraft, 932 A330/340/350s and 185 A380s, valued at US$438 billion at list prices which makes up six years production.

For Boeing 2008 was a year to forget with a 58-day machinist strike and the continual problems of getting its showcase 787 into the air.
Its order intake of 662 was however its eight highest and Boeing 737NG was again the star performer with 484 net orders. Boeing also sold 93 787s, 54 777s, 28 767-300ERs and three 747-8Is for its BBJ division.

Boeing Commercial Airplanes President and CEO Scott Carson told media that “while Boeing clearly faced obstacles, 2008 also was a time of accomplishment at Commercial Airplanes. With a balanced base of customers from all regions of the world, from airlines with varied business models, and with strong orders across our product line, we are now focused on executing this strong backlog position.

Boeing’s backlog exceeds 3,700 aircraft and is consider more stable than that of Airbus say analysts.

The company’s deliveries were knocked around by the strike and fell to 375 for the year from 441 in 2007. Boeing delivered 290 737NGs, 14 747s, 10 767s and 61 777s.

There is little doubt that 2009 will be the most difficult year for the airline industry since the start of the jet age but while sales may be scarce both manufacturers have production and flight milestones to accomplish that will shape their future for decades to come.

For Boeing the highest priority is to follow the lead of the 44th President of the United States Barack Obama and say “We can [get the 787 into the air].” And while they are about it, the 747-8 as well. Many future 787 and 747-8I sales depend on flight test hard numbers as well as guaranteed production dates.

By years end Boeing needs to have five 787’s flying and the flight test program well on track.

For Airbus the challenge is to get it A350 defined and into production to protect its promised 2013 deliveries.

For both Seattle and Toulouse probably their most challenging year ever.