Boeing's July aircraft deliveries tumble 20% from June, trailing Airbus

Boeing delivered 48 aircraft in July, a slight decline from June but an improvement year-over-year, while European rival Airbus handed over 67 jets, extending its year-to-date lead to 373 deliveries against Boeing's 328. These deliveries are crucial as they drive cash flow for planemakers. Boeing secured 31 gross orders in July, bringing its year-to-date net orders to 655 and its backlog to 5,968. Despite engine supply chain challenges, Airbus projects 820 deliveries for the year, whereas Boeing has not issued annual guidance as it focuses on stabilizing production following recent quality control issues.

Analysis

Boeing's July 2024 operational results present a mixed picture, with deliveries of 48 aircraft marking a year-over-year improvement and the company's best July since 2017, yet falling short of the 60 units delivered in June. The company continues to trail its primary competitor, Airbus, which delivered 67 jets in July, extending its year-to-date lead to 373 versus Boeing's 328. This gap is most pronounced in the critical single-aisle market, where Airbus has delivered 286 A320neo jets compared to Boeing's 243 737 MAXs, a significant metric given that these jets represent approximately 66% of the commercial market. While Boeing's order book remains robust with 655 net orders this year and a backlog of 5,968 aircraft, indicating strong long-term demand, its production remains constrained. The company has not provided annual delivery guidance as it focuses on stabilizing operations following a January 2024 safety incident. In contrast, despite facing its own significant engine supply chain delays from suppliers including RTX-owned Pratt & Whitney, Airbus reaffirmed its full-year guidance of 820 deliveries, signaling greater confidence in its near-term operational execution.

Key Decisions for Investors

• Investors in Boeing (BA) should view the year-over-year delivery growth as a tentative positive but weigh it against the persistent production lag behind Airbus and the lack of official guidance, making monthly delivery reports crucial for gauging the pace of its operational recovery.
• The persistent delivery lead and firm guidance from Airbus, despite acknowledged supply chain issues, reinforce its current stronger operational footing in the duopoly, which may warrant a continued premium for investors focused on near-term execution.
• The specific mention of delivery delays and a strike at RTX-owned Pratt & Whitney presents a clear headwind for the supplier, and investors should monitor for any resolution or further impact on its financial performance and relationship with key clients like Airbus.