Frankfurt, Germany — In the latest round of its decades-long battle for dominance in commercial aircraft, Europe’s Airbus established a clear sales lead over Boeing even before the American company suffered further fallout from manufacturing problems and ongoing safety concerns.
Airbus has surpassed Boeing for five consecutive years in aircraft orders and deliveries, and just reported a 28% quarterly increase in its net profit. It was already gaining market share by beating Boeing in developing a line of midsize, fuel-efficient airplanes that are cheaper for airlines.
And now Boeing faces a government-imposed production cap on its best-selling plane.
However, according to aviation analysts, the European company is unlikely to widen its lead much further in the Airbus-Boeing duopoly even as customers clamor for more commercial aircraft. The reason: Airbus is already manufacturing planes as fast as it can and has an order book of more than 8,600 orders to fill.
Therefore, its ability to take advantage of Boeing’s problems is “very limited,” according to Jonathan Berger, CEO of Alton Aviation Consultancy. Between strained supply chains and long delivery times for a hugely complex and highly regulated product, a passenger jet ordered today from Airbus may not arrive until the end of the decade.
Boeing also has a huge order book of more than 5,660 commercial aircraft. The mismatch between post-Covid flight demand and aircraft supply is bad news for both travelers and airlines.
“This has been an incredibly strong market recovery and people need more airplanes than they are getting,” said Richard Aboulafia, managing director at AeroDynamic Advisory. “And until they get those planes, you won’t have enough capacity. Guess what’s happening? Ticket price.”
Earlier this year, Boeing appeared to finally be recovering from two Max jet crashes in 2018 and 2019 that killed 346 people in Indonesia and Ethiopia. Then, on Jan. 5, a door plug on an Alaska Airlines 737 Max 9 exploded, and the company has been reeling ever since.
Boeing has since slowed manufacturing at the direction of the US Federal Aviation Administration. It lost $355 million in the first quarter due to a decline in aircraft deliveries and compensation it paid to airlines for the temporary grounding of the Max 9. The Max was Boeing’s answer to Airbus’ A320 family of aircraft. .
Airbus, which is registered in the Netherlands but has its headquarters in France, is taking a noticeably cautious and even modest stance in the face of its recent success and its rival’s problems. Chief Executive Guillaume Faury has said he is “not happy” with Boeing’s problems and that they are not good for the industry as a whole.
In a call with reporters on April 25, Faury was cagey about how much the company could speed up production, even with €8.7 billion in cash on hand. Airbus was facing “a variety of challenges” in getting the parts it needs, he said, and must “ensure that we move at a pace that is compatible with weaker suppliers.”
Faury stressed that any measures to expand production would be done taking into account “our fundamental pillars of safety, quality, integrity, compliance and protection.”
Airbus and Boeing have manufacturing limitations in part because the two companies are not so much airplane makers as they are “aircraft assemblers” that rely on thousands of parts made by other companies, from the fuselage and engines to electronics and interiors, he said. Berger of Alton Aviation. Since “supply chains are going as fast as they can,” Airbus is not in a position to go on the attack and capture Boeing customers.
However, the European company won a symbolic victory when United Airlines arranged the lease of 35 Airbus planes due to delays Boeing faces in getting U.S. regulators to approve its new, larger Max 10.
With this in mind, “Airbus is doing well. They are being very, very humble. “It’s smart because they can’t exploit it,” Berger said.
Last year, Airbus surpassed Boeing for the fifth consecutive year in the orders race, with 2,094 net orders and 735 aircraft delivered. Boeing had 1,314 net orders and delivered 528 aircraft.
Airbus currently leads Boeing in sales of large single-aisle aircraft by 80% to 20%, according to figures from Alton Aviation Consultancy. The matchup between the smaller Airbus A320 and Boeing’s 737 Max 7 and Max 8 is more even; Airbus is ahead in aircraft delivered, but Boeing is ahead by 54% to 46% when counting the European company’s order book.
Airbus’s success is not only due to Boeing’s mistakes. The company is benefiting from its decision to launch the A321neo, a single-aisle aircraft with between 180 and 230 seats. “Neo” means new engine option, meaning highly fuel efficient engines that save airlines money on one of their biggest costs. Boeing rushed to compete with the Max, a 737 equipped with new, more efficient engines, only to have problems with crashes and a door plug.
Airbus also benefited from a deal to acquire the smaller A220 developed by Canada’s Bombardier. Boeing does not have any competing products in that niche. Analysts say Airbus has an additional advantage with the upcoming A321XLR, a model that will allow airlines to use cheaper narrow-body aircraft on long-haul flights.
However, the company has already pushed back its target date to produce 75 A320 and A321 aircraft per month from 2025 to 2026, and moved the promised delivery date for the A321XLR from the second quarter of 2024 to the third.
“Boeing is getting some orders because Airbus can’t supply the planes,” said Scott Hamilton, CEO of consulting firm Leeham Company. “So Airbus can’t really gain much more in terms of market share because they are exhausted.”
The two companies’ current production pace means that older, less fuel-efficient planes will have to fly longer before being retired, so airlines will not be able to reduce fuel costs. And older planes require more maintenance to keep flying, which costs money but doesn’t impact safety if the maintenance is done correctly. For travelers, it means it will be harder to get discounted tickets.
Could another entrant shake up the duopoly, like Tesla did with cars? Not in the next few years, analysts said.
Brazil’s Embraer makes smaller regional jets and has so far taken no steps to compete with Boeing and Airbus. China’s COMAC has received more than 1,000 orders for its C919 narrowbody aircraft, but is “at least a decade or two” away from fielding a strong competitor, according to Berger.
That means that for now there is still a race between two companies, even if one of them is performing poorly.
“Airlines need at least two,” Berger said. “They don’t want to put themselves in a monopolistic situation. So everyone is applauding Boeing to get its act together.”
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AP Airlines reporter David Koenig in Dallas contributed to this story.