In the aircraft industry, the U.S. plane maker Boeing (BA, Financial) and the European plane maker Airbus (EADSY, Financial) have been engaged in a competition from the last few decades and whenever it came to orders it has always turned into a competitive ground between these two existing major rivals. A few days back, news sources confirmed that Airbus is just running after increasing the order count and thereby reducing the gap with the U.S. aircraft maker. In fact, till date Airbus has been a leader in the narrow bodied aircraft segment having more fuel-efficient versions in this plane category while Boeing has emerged the undoubted leader in the wide-bodied segment. Now, it’s important to quickly peek in and find out what the order book of the two aircraft manufacturers have to say regarding their position in the industry in the quest of gaining quick dominance over the other.
Comparing the order book count
The European plane maker stated a few days back that its order backlog has hit an industry record as customer demand is on the surge for better fuel efficient aircrafts. Airbus has recently hit the milestone with order backlog moving to more than 6,000 for the first time in its history. These numbers came as the pan-European plane maker revealed its orders gained in November. This in turn does bolster the company’s position in the fight with rival Boeing for dominance in the civil aviation market.
Presently Boeing, the U.S. manufacturer, has an order backlog of 5,703 jets. This includes the year to date order count of 1,274 adjusted for cancellations with 647 planes delivered to airlines in the year till date. On the contrary, the European counterpart took 248 orders in November and delivered 61 aircraft, taking the year to date order count to 1,031 including cancellations, with 554 jets delivered to clients. Hence, on comparison of the order count on an annual basis, Boeing this upholds its leadership position, but with more orders of A321s, A320neo and A330neos moving into Airbus kitty the order gap with Boeing has surely got narrowed to a considerable extent.
Gaining dominance in the aerospace sector
Though Boeing is still the market leader in the aircraft manufacturing domain, Airbus was faster to respond to airlines’ growing demand for fuel-efficient aircraft and this has aided in gaining an edge over Boeing in the fight for dominance. It was the first company to start developing modernized versions of its existing planes. The range known as the “neos” –Â derived from new engine option –Â is less fuel thirsty and also has better performance features through tweaking the aerodynamics.
Airbus officially launched the A320 neo in 2010 and in the Farnborough airshow held this year released the A330 neo which bagged several customers within a week of the airshow to start with its order book.
According to analysts, “Airbus was into the evolution of aircraft earlier than Boeing, taking out costs by giving them more efficient engines and reducing maintenance. Boeing was a little slower in its response.”
Boeing took an alternative approach responding to Airbus’ move by developing the Dreamliner from scratch, just like the “moonshot.” It incorporated more advanced technology and materials such as composites to improve efficiency, but missed on the costs which just went sky-rocketing while making the Dreamliner 787 from scratch.
The U.S. company has been pretty late in responding to Airbus’ neo program, and is currently introducing the MAX version of the 737 and upgrading its larger 777 aircraft to effectively reply to Airbus’ move.
Rivalry to pick up momentum
Analysts have opined that, although Airbus has been grabbing more orders in the past few months, the growth of its order backlog is only a temporary phase. Meanwhile, Boeing is delivering more jets than Airbus and the trend is likely to continue as the former ramps up its production. With the “neos” in production Airbus seems confident of bagging more orders, but at the same time the neo predecessors might show a paltry number in the order book in the coming future. On the other hand, the major score for Boeing is the $11 billion order it recently closed with Ryanair for Boeing 737 Max 200 planes this September. One point does stands crystal clear: the rivalry between the two aerospace giants is slated to continue with renewed vigour in the coming days. So, let’s stay tuned and keep an eye on the orders bagged by the two parties in discussion in the upcoming quarters.
