Two giants bestride the world of commercial aircraft: America’s Boeing and Europe’s Airbus. They are roughly equal in terms of orders for their aircraft and planes delivered over the last ten years. Boeing dominates the twin aisle or widebody market with its 747, 767, 777 and the new 787 Dreamliner. Yes, Airbus has the gigantic A380 but that is truly a niche play. The U.S. military is taking advantage of what Boeing has done in the commercial aircraft market. The U.S. and Indian navies have contracted with Boeing to build around 125 P-8 maritime surveillance aircraft which is based on a 737-800. The U.S. Air Force awarded Boeing a contract to build at least 179 KC-46 aerial refueling tankers based on the 767 commercial airplane.
The real game is in single aisle aircraft. This is where the major growth is expected to come over the next twenty years in the commercial airline industry. China, in particular, is expected to be a major purchaser of these planes.
Boeing used to be dominant in this area too with its 737. Then Airbus came along with the A320 series taking significant market share away from Boeing. Boeing responded with the 737 Next Generation. Airbus countered with the more efficient A320neo. Now Boeing is about to deploy the 737 MAX which provides even more efficient engines as well as a new wing design.
Many industry experts believe that Airbus would not have been able to challenge Boeing in the single aisle market, particularly as it was also attempting to build the A380, were it not for massive subsidies from European governments. This was the conclusion of the WTO in a series of rulings. The WTO basically concluded that Airbus would not have been able to successfully build and sell any of its aircraft were it not for these subsidies. This unfair advantage has probably cost the United States a hundred thousand manufacturing jobs.
That said, Boeing has become a better company, producing better planes, as a result of that competition. The new 777 freighter dominates the long distance cargo market. The company has 800 firm orders for the 787 Dreamliner with many more to come. The 737 MAX is said to blow the doors off the A320neo. It just proves the power of America’s private sector even on an uneven playing field.
Find Archived Articles: