Airbus vs. Boeing: Rock-Em, Sock-Em’s Next Round

The worldwide grounding of Boeing’s 737 MAX has significantly altered the planemakers’ rivalry.

For much of the sustained rivalry between Boeing and Airbus, Boeing has held the number one spot and Airbus has been the hungry challenger. But with the 737 MAX debacle dragging on, can Boeing still lay claim to the title of world’s largest planemaker?

In 2019 it was clear that Airbus was top dog—and the race wasn’t even close. Boeing delivered only 380 planes last year, at a value of $42 billion—the lowest amount since 2008 when a two-month strike shut down production. In contrast, Airbus’ deliveries more than doubled Boeing’s at 863 planes worth about $60 billion.

The news is even worse for Boeing when you look at new orders. Airbus won 768 new orders for its planes in 2019, worth about $39 billion. Boeing’s numbers were actually in the negative: -87, with customers actually canceling more existing orders than committing to new aircraft, costing Boeing about $2.5 billion in lost revenue.

Unsurprisingly, Airbus dominated in the single-aisle market—the sector that Boeing’s troubled 737 MAX operates in. The European aerospace company’s A320 is a direct competitor to the MAX.

The grounding of the 737 MAX has put a serious dent in the American company’s dominance. Airbus has been cautious about presenting its aircraft as alternatives to Boeing’s controversial jet because it’s not in an ideal position to fulfill the orders of airlines that want to drop the MAX. Airbus has a significant backlog of A320 orders.

“We are sold out through 2025 roughly and therefore we cannot step in to offset the needs of airline customers that will not be fulfilled,”said Airbus CEO Guillaume Faury.

Airbus could benefit from a boost in sales of its A220, the former C Series jet that Airbus bought from Bombardier. The A220 could be an alternative to the 737 at the lower end of the MAX’s range, particularly if a larger version is produced. Boeing doesn’t have a direct comparable to the A220—yet: its deal to purchase Embraer’s E-Jet line still hasn’t been finalized.

“We have opportunities on the 220,” said Faury, “but it’s a slightly lower segment. But we think the 220 can be a very appropriate solution for some of the needs in the market. We see the success of the product growing and we think the 220’s a very strong offer for many customers.”

The Wall Street Journal thinks the rivalry is changing significantly.

But does one bad year—one really bad year, admittedly—mean Boeing has been finally dethroned?

It hasn’t been all bad news for Boeing. The American planemaker still leads in the widebody market with the 787 Dreamliner—and the new 777X recently completed its first test flight. Boeing delivered 253 jets in this category, outpacing Airbus’ 173 deliveries.

And airlines haven’t completely turned their backs on the MAX: British Airways announced it would order 200 of them at the Paris Air Show—though that order likely won’t be finalized until regulators allow the plane to fly again.

Airbus has had its own setbacks in recent years as well. It had to shut down its expensive A380 superjumbo project after failing to secure enough orders for the plane. And it’s been mired in a bribery scandal, which only now seems to be clearing up now that the company has agreed to a settlement with regulators expected to cost about $4 billion. But in the public eye that scandal has taken a back seat to the worldwide grounding of the MAX.

A new arena of competition between the two aerospace rivals has recently opened up: China, the world’s second-largest aviation market, which Boeing anticipates will need to spend $2.9 trillion on more than 8,000 planes and their ground support in the next two decades.

Airbus has an advantage for the moment. While Boeing is caught in the middle of the U.S.-China trade dispute, Airbus has been in talks with China Aviation Supplies Holding Company—the state agency that buys planes for Chinese airlines—about being the aircraft supplier for the country’s next five-year economic plan, a plan that begins next year.

Boeing will need to play catch-up once the trade dispute gets resolved—and the countries recently agreed to an accord that has China committing to buy American aircraft. It’s not likely that either aerospace company will be blocked out of the lucrative Chinese market entirely, since the country historically divides its orders fairly evenly between the two, wisely stoking competition between them.

Since the 737 MAX was grounded in March 2019, the playing field has changed dramatically, with Airbus making serious inroads into Boeing’s traditionally stronger position. The two planemakers have been engaging in a tit-for-tat competition for over four decades and, between them, they account for about 99 percent of the global passenger aircraft market. While the Boeing-Airbus duopoly shows no sign of faltering, it’s clear that the landscape in which their rivalry has played out has changed.

Boeing is bruised but not beaten, and Airbus is riding high on momentum—and they’ll continue their heated competition for the foreseeable future.

Read more about the intense rivalry between these two manufacturing behemoths at Airbus vs. Boeing: Rock-Em Sock-Em Aerospace Giants.