Boeing (BA, Financial), the lead aerospace major, dominates the wide-body jet space with its long haul portfolio that includes the 777 and the revolutionary 787 Dreamliner. However, the fight for greater share in the wide-body arena is heating up with Airbus (EADSY, Financial) launching the A330neo airliner at the recently held Farnborough Airshow. Which aircraft giant is getting higher orders? Which planes are drawing greater attention from the airlines? Let’s find out.
The Wide-body Fight
As airline operators are looking to expanding or replace their existing fleet with newer set of more efficient aircraft, the battle between European major Airbus and American giant Boeing is getting fierce. Delta Air Lines is looking to replace its current fleet and is presently weighing options between the two majors.
The airline operator, which currently flies the Boeing 747-400s and 767-300ER, plans to replace significant part of the fleet by issuing a request for proposal for fresh wide-body jets. Delta has shown great interest to make the A330neo part of its fleet. Before Airbus had announced its plan to launch the A330neo, Delta CEO Richard Anderson said, “There is a huge need for a small wide-body. We really need Airbus to step up and re-engine.”
Order for the A330neo should give Airbus a good boost, particularly after the technical slips with the superjumbo A380. Both Boeing and Airbus have spent billion in developing the all-new aircraft, the 787 Dreamliner and the A350 respectively. The 787 Dreamliner, like the A350 that is scheduled to enter service late this year, has been quite a difficult project considering the delay and the amount of money spent on the technical problem. Big jet developed from scratch invite huge complications and associated risks, and that is what we saw with the composite material made 787.
The Chicago-based company is working to overcome such problems. Other than this, there are high hopes from Boeing’s 777 family of jet, its most popular wide-body aircraft. With the re-engineered version, the 777X, the company expects to win more wide-body orders that would further add to its epic backlog.
While both the aircraft manufacturers are solidifying their wide-body portfolio, some analysts are a bit skeptical about it, fearing an oversupply of such aircraft.
Does the Market have Hunger Enough?
Managing director at Lundquist Group Jerrold Lundquist says that the wide-body market is overheated and airlines are extremely eager to get newer fuel efficient jets. There is a lot of excitement about the A330neo, with expectations that its order book would run over 1,000 units. In his words, “There appears to be demand for it now, but it just adds to the ordering.”
Such demand for aircraft brings in the fear of a bubble regarding the backlog, which is presently at its record high. Richard Aboulafia of Tele Group believes that if all airlines continue to place orders to the neck, it could result in a grave problem by the end of the decade. However, both Airbus and Boeing are confident about the backlog and are dismissing any such fear regarding an aircraft bubble. They expect solid demand for wide-body planes with seat capacity in the range of 250-300 in the next two decades. They estimate to have demand for some 4,500 jets valued $1 trillion. This is a big market for the 787s and the A330s.
Departing Thoughts
Under the current circumstances, Boeing’s facing tremendous competition from Airbus’ A330 that competes with the 787. The jet maker would make sure that airlines do not shift to Airbus as that would severely impact Boeing’s wide-body market share. Industry watcher shall stay tuned to keep track of the developments.
