By Ezra Kaplan
After a year of consistently declining stock value, Airbus announced a new company record for planes delivered in 2014. Boeing also broke a company record after delivering nearly 100 more planes than Airbus during the year.
“Last year was a real paradox,” said Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development & Professor of Transportation at DePaul University. “Strong airplane sales with bad profits, and they’re taking it on the chin in the stock markets.”
Both Airbus Group NV, registered in the Netherlands and headquartered in France, and Seattle based Boeing Co. announced their record-breaking years early in January. Boeing reported 723 planes delivered while Airbus produced 629.
As Boeing continues to dominate the aviation industry, investors have taken notice. After two years of steadily climbing stock, Airbus saw its stock value plummet by 30 percent over the past year.
While Airbus claims to be the “world’s leading aircraft manufacturer of passenger airliners, ranging in capacity from 100 to more than 500 seats,” it has struggled to break into the smaller regional jet market.
Simultaneously, the large size aircraft that Airbus is well known for just hasn’t been as economically successful as the company had hopped.
“They are getting squeezed on both ends,” Schwieterman said. “The big planes aren’t making as much money as they had hoped and the smaller planes aren’t selling the way they would like, and that’s where the cash is.”
Schwieterman added that Airbus hasn’t been particularly successful in the military business– an area where its top competitor has thrived.
This is the third year in a row that Boeing won out over Airbus while simultaneously setting yearly industry records.
“What the Boeing team achieved in 2014 is truly unprecedented, especially in the face of fierce competition,” said Boeing Commercial Airplanes President and CEO Ray Conner.
Conner saw his company’s stock rise over 2013 and over the past year has been relatively devoid of volatility.
Both companies have a common enemy potentially resting on the horizon. Lower fuel prices will take away some of the motivation to modernize aging, fuel-guzzling fleets. This could mean a drop in sales for both aviation giants.