Boeing vs Airbus

Boeing vs. Airbus

The two major airline manufacturers Airbus and Boeing have been in close competition for aircraft orders and production since the early 2000’s.  There is a significant difference between the companies in global presence, manufacturing, products, and company philosophies.  Boeing was founded in 1916, a year later was building aircraft for the U.S. Navy, and by 1928 built their first 12 passenger airplane for the sole purpose of commercial air travel.  Today Boeing employs approximately 170,000 workers.  A relatively young company, Airbus was founded in 1970 and dove right in to the commercial airline industry; their first A300 flew in took flight in 1972.  Airbus made a number of technological advancements along the way to becoming a competitor for Boeing, among these were the first commercial aircraft to have a two man crew, eliminating the flight engineer, and the first to have a completely fly by wire flight control system.  As of August this year, Airbus claims around 7,400 aircraft in operation.  Today the two manufacturers compete fiercely for aircraft orders from major airlines. 

Both of these massive aircraft manufacturers rose to the top by producing innovative aircraft that are able to carry a large number of passengers an incredibly long distance.  The manufacturer Boeing holds a strong market position that includes defense contracting and aerospace production.  Additionally Boeing has a strong technological research and development department, increasing their capabilities to provide advanced products such as airframes comprised of up to 50% composite materials.  Conversely, Airbus has produced quality aircraft to rival Boeing’s, such as the A380 which is the largest in their fleet carrying a high volume of passengers.  Airbus’ A320 series presents direct competition to Boeing’s 747 as both companies’ continue to improve their wide body aircraft with any upgrade to get an advantage over the other. 

Air transport is growing on a global level, creating demand: this year alone Airbus received 1,062 aircraft orders and Boeing close behind with 942.  An increase in defense spending in China and India produces an opportunity for Boeing; the company is already established in country and boast of almost a century of defense contracting experience.  Boeing has diversified globally and receives a large amount of materials from around the globe, whereas Airbus is almost strictly contracted with European countries.  Airbus too has experienced demand for their aircraft globally, and will likely produce in part for the major increase in defense spending for India and China. 

As airline demand continues to increase, both companies are receiving more orders than they can fulfill, Boeing leads deliveries with 476 and Airbus at 445.  While Airbus leads with orders it is contested that both companies are producing almost equally.  This provides strength to the argument the two create duopoly and control the entirety of the commercial airliner market.  A determining factor in the next two decades will be the growth predicted in China, India, and much of the Southeastern seaboard.  The unionization of Boeing’s manufacturing employees creates an uncertainty in production from labor strikes and work stoppages that has the potential to give Airbus an advantage if resolutions are not quickly implemented. 

It is likely Boeing will still be the leader in aircraft manufacturing for years to come due to their size, global diversification, and the quality of advanced aircraft they produce.  Further, Airbus is a subsidiary of the European Aeronautics Defense and Space Company (EADS), unlike Boeing which is publicly traded globally as part of the Dow Jones Industrial Average.  Direct competition such as Bombardier, Commercial Aircraft Corporation of China, and Russia’s Irkut Corporation will likely cut into Airbus’ share of the market on a global scale before Boeing’s well established manufacturing industry is affected.

References

Airbus. (2013). Orders and Deliveries. Retrieved from http://www.airbus.com/

Boeing. (2013). Orders and Deliveries. Retrieved from http://www.active.boeing.com/

Burdick, D., DiPonzio, J. (2013). Which airline manufacturer will be the industry leader in the next 5 years – Boeing or Airbus? Science College, Alfred University, New York.

Wilhelm, S. (2013, October 4). Boeing leading Airbus in 2013 deliveries, but trailing in orders. Puget Sound Business Journal. Retrieved from http://www.bizjournals.com/seattle/news/2013/10/04/boeing-bests-airbus-in-deliveries.html