Pulling that off will require navigating the industrywide challenges hampering both companies while also landing a string of successes — starting with getting plane production back on track.
“Boeing is in a situation that is way more difficult than Airbus,” said Saïma Hussain, an analyst at AlphaValue, an equity research firm.
“Airbus is gaining market share while Boeing needs to recover.” The two companies form a duopoly in the global passenger plane market, but Airbus has far outproduced and outsold Boeing in recent years.
Airbus has delivered over 3,800 planes to customers since the start of 2019, while Boeing has handed about 2,100, according to Cirium, an aviation data provider.
Of course,” Campbell Wilson, the chief executive of Air India, a Boeing and Airbus customer, said last month during a panel discussion at the Farnborough Air Show near London.
A significant win was achieved by Airbus four years ago when, for the first time in company history, more of its passenger aircraft were in operation globally than those manufactured by rival Boeing. Ever since, Airbus’s hold on the market has only gotten stronger.
One of the most challenging tasks for Kelly Ortberg, Boeing’s recently appointed CEO, will be to tip the scales back in the company’s favor. To do that, both companies must overcome industry-wide obstacles impeding their progress and achieve a number of victories, beginning with restarting plane production.
“Airbus is not in the same situation as Boeing,” stated Saïma Hussain, an analyst at the equity research firm AlphaValue. Although Boeing needs to heal, Airbus is gaining market share. “.
In the global passenger plane market, the two firms hold a monopoly, but in recent years, Airbus has significantly outpaced Boeing in terms of both production and sales. Cirium, an aviation data provider, reports that since the beginning of 2019, Airbus has delivered more than 3,800 aircraft to customers, while Boeing has delivered roughly 2,100.
Unfortunately, these businesses are currently having difficulty building aircraft quickly enough for their clients, who are in dire need of planes to meet the growing demand for travel across the globe.
Of course it’s frustrating. Campbell Wilson, the CEO of Air India, a customer of Boeing and Airbus, stated last month during a panel discussion at the Farnborough Air Show near London, “Of course, we would love to get more aircraft more quickly.”. There is a bright side, he continued: “We’re all in the same boat.”. Everyone is in pain. “.
Boeing, on the other hand, has experienced two crises in contrast to Airbus: a pair of deadly crashes in 2018 and 2019, which resulted in a nearly two-year worldwide ban on the popular 737 Max plane, and a flight in January where a panel blew off a Max jet at an altitude of roughly 16,000 feet.
Regulators began to closely examine those occurrences, and Boeing was compelled to reconsider its policies and procedures. Moreover, even though there were no serious injuries from the January incident, it prompted a management change that resulted in the appointment of Mr. Ortberg as CEO. Rockwell Collins is a significant supplier to Boeing and Airbus.
Mr. Ortberg has his work cut out for him despite his industry experience.
Its contract expires in mid-September, and his first task will be to oversee negotiations with the union that represents production workers in order to prevent a strike. He will also be in charge of managing initiatives to control output and resolve issues with quality.
A Boeing spokesperson cited a message Mr. Ortberg sent to staff members on his first day as CEO in response to a question.
In that statement, he said, “I’m confident that working together, we will return the company to be the industry leader we all expect, even though it’s clear that we have a lot of work to do in restoring trust.”.
At the biennial Farnborough show, an aerospace industry venue for deal-making, the disparity in the recent fortunes of Airbus and Boeing was evident. Airbus was jubilant that its most popular passenger aircraft, the A321XLR, a long-range version of the A321neo, had just received certification from European aviation authorities. Boeing had been developing a plane similar to this, but the company put it on hold while it addressed the aftermath of the Max crashes.
More than 500 orders have been placed for the A321XLR. Research analyst Cai von Rumohr of the investment bank TD Cowen said, “That’s been a bigger success than anyone would have thought.”. Boeing is at a loss for a response. “.
Guillaume Faury, the CEO of Airbus, outlined goals to expand on the company’s achievements in an interview conducted during the air show. Airbus is now aiming to do the same for larger twin-aisle, or wide-body, planes that are frequently used on lengthy international flights. Airbus has taken the lead in the market for single-aisle planes, which drive global aviation.
He declared, “We would love to do on the wide-body business what we’ve managed to do on the single-aisle versus Boeing.”. “With the products we have, we believe that is feasible. “.
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However, Airbus may not always benefit from Boeing’s suffering. The destiny of the two businesses is somewhat entwined: the supply chain supporting both may suffer if one falters.
Due to supplier struggles, the two rivals are not able to complete planes as quickly as customers would like. An industry-wide challenge of making up for years of experience lost when workers retired early or were laid off during the pandemic and a bottleneck in the delivery of parts, including engines, are the causes of the problem.
The Federal Aviation Administration restricted Boeing to building no more than 38 Max aircraft per month following the company’s panel blowout until the company demonstrated that it had achieved enough quality improvements. Boeing says it wants to reach the F, but it is currently producing 20 to 30 per month. A. A. limit by the year’s end.
A few significant aircraft that Boeing has been working on are also facing protracted delays in the market. For instance, approval of the largest Max variant, the Max 10, which is Boeing’s response to the well-liked A321neo, is still pending.
Furthermore, Boeing is in the process of negotiating a new contract with its biggest labor union, District Lodge 751 of the International Association of Machinists and Aerospace Workers. The union’s 33,000 members are still bitter about concessions made ten years ago on pensions and other matters. A second vote would be held prior to a walkout, but last month, the union’s members overwhelmingly decided to approve a strike. This week saw the start of negotiations over fundamental economic issues; the current contract expires on September. 12.
Airbus has its own set of difficulties. It produces at a rate faster than Boeing, but delays in getting engines from CFM International—a joint venture between General Electric and the French manufacturer Safran Aircraft Engines—have impeded it. The company had experienced delays in receiving landing gear and seats, Mr. Dot Faury also disclosed to investor analysts last month.
The manufacturer has delayed its intentions to boost output of the A320 family of aircraft, which competes with the Max. In June, the company stated that it anticipated achieving a monthly production rate of 75 A320s in 2027, one year later than anticipated. Citing a shortage of parts from suppliers, it at the time slightly lowered its production estimate for this year.
Even though Boeing’s issues are more pervasive, the business has recently made some headway in trying to resolve them.
Boeing is attempting to streamline its plans and procedures, has expanded oversight of its suppliers and own operations, and enhanced training for new hires in an effort to improve quality. Boeing has also restricted the amount of time that manufacturing tasks can be completed outside of the prescribed order, a practice known as traveled work that increases the risk of error. Additionally, the business is finalizing its acquisition of Spirit AeroSystems, a significant Kansas-based supplier that Mr. Ortberg visited on Monday.
Boeing recently began F, and it is closely collaborating with authorities to enhance safety and quality. An. An. test flights for the 777-9, a wide-body aircraft with more than 380 unfilled orders from the company that is intended to transport hundreds of passengers over very long distances.
Experts predict that Boeing’s upcoming new aircraft, which might not be released for another ten years, will play a major role in reestablishing equilibrium in the rivalry with Airbus. Depending on his tenure, Mr. Ortberg will be in charge of organizing that project, if not providing overall direction.
