Déjà vu all over again
Looking over the final orders numbers for 2006, I just had to chuckle, recalling baseball legend Yogi Berra, who once said, “I always thought that record would stand until it was broken.”
My thoughts exactly.
Who’da thunk it, right? One year ago we thought, no way could we see a repeat of 2005. But for a second year in a row Boeing has achieved a record for orders. It was another remarkable year not only for us but for our customers and the industry as a whole.
As Yogi would say, “You can observe a lot by watching.” And no doubt we’ll be observing many more of these rolling out of the factory next year. This is the newest model Next-Generation 737, the 737-700ER, rolling out for the first time earlier this week.
Customers have endorsed our product line across the board, from single-aisles, to mid-size widebodies, all the way up to the amazing performance of the 747 this year. The 1,044 net orders recorded in 2006 are the most this company has ever booked in a single year. It adds up to a strong, well-balanced backlog, with significant orders from customers around the globe.
And it says to me that the recovery in the aviation industry is going strong, with sustained traffic growth, increases in point-to-point travel, new routes and more frequencies, and continued demand for new fuel-efficient airplanes.
But of course at this point everyone likes to talk about the numbers. And this time every year I get asked two very difficult questions.
The first question is: What’s your prediction for 2007 orders?
And I wish I had an answer to that, because I’m tired of answering that question. (That’s another Yogi-ism, by the way.)
Anyway, the deal is that Boeing does not forecast orders. I couldn’t even if I tried. Look at the past two years. You just can’t predict stuff like this. So the best way to answer this is to say that a lot of factors are involved, and it’s impossible to forecast how the business environment will translate into order totals in 2007.
But we can say - as we said last year - that the basic industry fundamentals remain sound. In a general sense I’d expect this order cycle to continue. Keep in mind that a number of traditional North American and European carriers have not yet participated in this cycle in a big way.
And certainly demand for new airplanes continues to be strong, both for meeting growth and for replacing older airplanes with newer, more efficient models that use less fuel and offer lower overall operating costs.
So while we don’t make predictions about orders, especially in the wake of two record years, there’s every reason to believe that 2007 will be another good year.
And now the second difficult question I get asked this time each year: Who’s going to win the orders race, Boeing or Airbus?
And to that I say, check back in a few weeks. After all, it ain’t over ‘till it’s over.