Boeing (NYSE: BA) and Airbus (EPA: AIR), both pioneers in the airspace industry, announced that they have received more than $43 billion in airliner orders. This creates added pressure for them to boost plane production despite certain capacity issues. Thus far during the UK's Farnborough Air Show, Boeing and Airbus have received and committed to orders of more than $70 billion and $52 billion, respectively, at list prices. The price tag has not yet been finalized and many airlines usually get discounts on large orders. In the coming 20 years, Boeing expects 42,730 deliveries, while Airbus predicts around 37,390.
Boeing estimates that single-aisle planes will lead the airliner growth as these have also dominated their deals. Boeing's biggest deal was with Jet Airways, which has purchased 75,737 Max 8 jetliners. The deal is valued at $8.8 billion not including "bundle purchase" discounts. Airbus also announced an $8.8 billion deal with an undisclosed buyer for 80 A320neo narrow bodies. Their plan is to produce 60 A 320s per month next year from around 52 per month as of today. Guillaume Faury, President of Airbus' Commercial Planes Aircraft, said in an interview that "The demand is there. We could sell more if we had the capacity. It's just going to take us a little while, but there's no technological reason we can't do it. It's simply a supply-chain constraint at this point." However, Boeing and Airbus have to be careful to make sure that this escalating rate of output does not backfire. Akbar Al Baker, Qatar Airways CEO, warned that "there will be pressure on them on quality, and then the delays will set in."
Boeing was also awarded a $3.9 billion fixed-price contract by the Pentagon to replace the current two Air Force One jets. The jets are two Boeing 747-8s expected to be completed by December 2024. The Air Force wanted to make sure that this was a fixed-price contract to make sure that they are not responsible for any additional costs. Then President-elect Trump tweeted in December 2016 that "costs are out of control," which were then estimated at $4 billion, and threatened to cancel the order.
Boeing is estimating that fleet growth and traffic growth are constant at 3.5% and 4.7%, respectively and that demand for the next 20 years will be equal to around $15 trillion. Both Boeing and Airbus will continue to benefit from this growing market.