The competition between Airbus and Boeing has been characterised as a duopoly in the large jet airliner market since the 1990s. This resulted from a series of mergers within the global aerospace industry, with Airbus beginning as a European consortium while the American Boeing absorbed its former arch-rival, McDonnell Douglas, in a 1997 merger. Other manufacturers, such as Lockheed Martin, Convair and Fairchild Aircraft in the United States, and British Aerospace and Fokker in Europe, were no longer in a position to compete effectively and withdrew from this market.
In the 10 years from 2004 to 2014, Airbus has received 8,933 orders while delivering 4,824, and Boeing has received 8,428 orders while delivering 4,458. In the midst of their intense competition, each company regularly accuses the other of receiving unfair state aid from their respective governments.
While the 737NG outsold the A320ceo family since its introduction in 1998, it is still lagging overall with 7033 orders against 7940 in January 2016. Airbus received 4471 orders since the A320neo launch in December 2010, while the 737 MAX got 3072 from August 2011 till January 2016. In the same timeframe, the neo had 3355 orders. Through August, Airbus have a 59.4% market share of the re-engined single aisle market, while Boeing had 40.6%; Boeing has doubts on over-ordered A320 neos by new operators and expects to narrow the gap with replacements not already ordered.
Flight Global fleet forecasts 26,860 single aisle deliveries for a $1,360 Bn value at a compound annual growth rate of 5% for the 2016-2035 period, with a 45% market share for Airbus (12090), 43% for Boeing (11550), 5% for Bombardier Aerospace (1340), 4% for COMAC (1070) and 3% for Irkut Corporation (810) ; Airbus predicts 23,531 and Boeing 28,140. Single aisles generates a vast majority of profits for both, followed by legacy twin aisles like the A330 and B777: Kevin Michaels of AeroDynamic Advisory estimates the 737 have a 30% profit margin and the 777 classic 20%.
Flight Global fleet forecasts 7,960 twin aisle deliveries for a $1,284 Bn value for the 2016-2035 period. The B787 should lead with 31% of the market share, followed by the A350 with 27% and the 777 with 21%, then the A330 with 7% as the A380
During the 1990s both companies researched the feasibility of a passenger aircraft larger than the Boeing 747, which was then the largest airliner in operation. Airbus subsequently launched a full-length double-deck aircraft, the A380, a decade later while Boeing decided the project would not be commercially viable and developed the third generation 747, Boeing 747-8, instead.The Airbus A380 and the Boeing 747-8 are therefore placed in direct competition on long-haul routes.
Rival performance claims by Airbus and Boeing appear to be contradictory, their methodologies unclear and neither are validated by a third party source. Boeing claims the 747-8I to be over 10% lighter per seat and have 11% less fuel consumption per passenger, with a trip-cost reduction of 21% and a seat-mile cost reduction of more than 6%, compared to the A380. The 747-8F's empty weight is expected to be 80 tonnes (88 tons) lighter and 24% lower fuel burnt per ton with 21% lower trip costs and 23% lower ton-mile costs than the A380F. On the other hand, Airbus claims the A380 to have 8% less fuel consumption per passenger than the 747-8I and in 2007 Singapore Airlines CEO Chew Choong Seng stated the A380 was performing better than both the airline and Airbus had anticipated, burning 20% less fuel per passenger than the airline's 747-400 fleet. Emirates' Tim Clark also claims that the A380 is more fuel economic at Mach 0.86 than at 0.83. One independent, industry analysis shows fuel consumption in litres per seat per 100 kilometres flown (L/seat/100 km) as 3.27 for the A380 and 3.35 for the B747-8I, or a fuel cost per seat mile of $0.055 and $0.057 respectively. A possible, as yet uncommitted, re-engined A380neo is expected to achieve 2.82 or 2.65 L/seat/100 km depending on the options taken.
As of December 2015, Airbus has 319 orders for the passenger version of the A380 and is not currently offering the A380-800 freighter. Production of the A380F has been suspended until the A380 production lines have settled with no firm availability date. A number of original A380F orders were cancelled following delays to the A380 program in October 2006, notably FedEx and the United Parcel Service. Some A380 launch customers converted their A380F orders to the passenger version or switched to the 747-8F or 777F aircraft.
At Farnborough in July 2016, Airbus announced that in a "prudent, proactive step," starting in 2018 it expects to deliver 12 A380 aircraft per year, down from 27 deliveries in 2015. The firm also warned production might slip back into red ink on each aircraft produced at that time, though it anticipates production will remain in the black for 2016 and 2017. The firm expects that healthy demand for its other aircraft would allow it to avoid job losses from the cuts.
As of June 2014, Boeing has 51 orders for the 747-8I passenger version and 69 for the 747-8F freighter. The announcement in March 2008 that Boeing had lost a US$40 billion refuelling aircraft contract to Northrop Grumman and Airbus for the EADS/Northrop Grumman KC-45 with the United States Air Force drew angry protests in the United States Congress. Upon review of Boeing's protest, the Government Accountability Office ruled in favour of Boeing and ordered the USAF to recompete the contract. Later, the entire call for aircraft was rescheduled, then cancelled, with a new call decided upon in March 2010 as a fixed-price contract.
Boeing later won the contest against Airbus (Northrop having withdrawn) and US Aerospace/Antonov (disqualified), with a lower price, on February 24, 2011. The price was so low some in the media believe Boeing would take a loss on the deal; they also speculated that the company could perhaps break even with maintenance and spare parts contracts. In July 2011, it was revealed that projected development costs rose $1.4bn and will exceed the $4.9bn contract cap by $300m. For the first $1bn increase (from the award price to the cap), the U.S. government would be responsible for $600m under a 60/40 government/Boeing split. With Boeing being wholly responsible for the additional $300m ceiling breach, Boeing would be responsible for a total of $700m of the additional cost.
Because many of the world's airlines are wholly or partially government owned, aircraft procurement decisions are often taken according to political criteria in addition to commercial ones. Boeing and Airbus seek to exploit this by subcontracting production of aircraft components or assemblies to manufacturers in countries of strategic importance in order to gain a competitive advantage overall.
For example, Boeing has maintained longstanding relationships since 1974 with Japanese suppliers including Mitsubishi Heavy Industries and Kawasaki Heavy Industries by which these companies have had increasing involvement on successive Boeing jet programs, a process which has helped Boeing achieve almost total dominance of the Japanese market for commercial jets. Outsourcing was extended on the 787 to the extent that Boeing's own involvement was reduced to little more than project management, design, assembly and test operation, outsourcing most of the actual manufacturing all around the world. Boeing has since stated that it "outsourced too much" and that future airplane projects will depend far more on its own engineering and production personnel.
Partly because of its origins as a consortium of European companies, Airbus has had fewer opportunities to outsource significant parts of its production beyond its own European plants. However, in 2009 Airbus opened an assembly plant in Tianjin, China for production of its A320 series airliners.
Happy Flying
Connor Marshall
