Big News for Boeing

Lufthansa made a huge announcement in the airline world today, ordering 20 747-800 aircraft worth 5.5 billion US dollars in total.

Lufthansa has traditionally gone with Airbus aircraft as the German government is one of the major stakeholders in the company. Airbus has spent the past five years producing the A380, a double decker aircraft that will be the largest passenger plane in the world. Several years ago, it looked like Airbus was going to surpass Boeing as the world's biggest airline manufacturer. This is no longer the case. Boeing developed the newer, smaller, fuel efficient 787 and the plane is a hit, producing hundreds of orders to date. Meanwhile, Airbus has had some major snafus with the A380 (wiring issues are the largest concern) and is struggling to produce the aircraft it has orders for. Delivery for most of their customers has been pushed back at least a year if not longer. For airlines that were counting on these planes to add seats on high density markets, they are now scrambling to come up with alternate plans. No U.S. passenger airline ordered the A380. The major customers have been Emirates, which operates out of Dubai, Singapore Airlines, and the European flagship carriers (Lufthansa, British Airways, Air France) have ordered 10-20 of these planes respectively. Both Fedex and UPS placed orders for the cargo version of the aircraft, but Fedex recently cancelled their order stating they could not wait for the A380 and ordered 777 freighters from Boeing. Airbus will likely only produce about 200-300 A380s total and looks to lose about 15 to 20 billion dollars over the long haul if not more.

Up to this point, only cargo orders had been placed for 747-800 aircraft. Lufthansa's passenger plane order represents a solid airline willing to be the first one to jump in the pool, so to speak. More airlines will now follow and Boeing, it seems, cannot make a wrong move these days.