Airbus versus Boeing: Demand for Planes May Have Peaked

Airbus SAS (AMEX:EAD) is likely to report a 50 percent drop in new aircraft orders this year in a lull after the rush for its A320neo aircraft.

The aircraft maker maintained its lead over competitor Boeing (NYSE:BA) for the ninth straight year when it won 1419 orders, a record high, in 2011. This was driven primarily by the demand for its fuel-efficient A320neo aircraft. However, both companies benefited from increased demand from Asia even though off-take was low in the developed countries.

“Airbus’s record intake is the result of our strategic decision on the A320neo,” Airbus Chief Executive Tom Enders said in a presentation. “However, the continuous ramp-up to unprecedented production rates on all programs will demand a strong focus on the supply chain and our own delivery capabilities.” This should be read in the context of Airbus’ plan to deliver 570 aircraft in 2012, and difficulties faced by its supply chain and component suppliers due to the European debt crisis.

But Boeing may finally turn the tables this year, and take the lead in orders due to its recent introduction of the fuel-stingy 737 Max aircraft, the demand for which is increasing.

Here’s how these plane manufacturers’ stocks are trading on the news:

Wells Fargo Advantage Income Op (AMEX:EAD): EAD shares recently traded at $10.08, down $0.01, or 0.1%. They have traded in a 52-week range of $8.20 to $10.72. Volume today was 160,665 shares versus a 3-month average volume of 208,808 shares.

Boeing Co. (NYSE:BA): BA shares recently traded at $75.72, up $1.12, or 1.5%. They have traded in a 52-week range of $56.01 to $80.65. Volume today was 1,752,439 shares versus a 3-month average volume of 5,640,610 shares. The company’s trailing P/E is 14.98, while trailing earnings are $5.05 per share.