Airbus moves ahead as Boeing’s troubles mount

Airbus moves ahead as Boeing's troubles mount

Airbus last week consolidated its position as the world’s largest aircraft maker for the fifth consecutive year. announcement of It has delivered more planes and received more orders than Boeing in 2023. At the same time, Boeing was trying to overcome a major public relations and safety crisis caused by a deadly disaster involving its 737 Max line of airliners.

In the long-running duel between the two aviation rivals, Airbus has gone far ahead.

“What used to be a monopoly has become two-thirds Airbus, one-third Boeing,” said Richard Aboulafia, managing director of Aerodynamic Advisory in Washington, DC. “To see Airbus and a company run by capable people,” he said. “The contradiction with Boeing runs deep.”

The incident involving the 737 Max 9, in which a hole opened up in the fuselage of an Alaska Airlines flight mid-air, was the latest in a series of safety lapses in Boeing’s workhorse aircraft — including two fatal crashes in 2018 and 2019 — that have indirectly Helping to propel the fortunes of the European aerospace giant.

As the Federal Aviation Administration widens its investigation into Max 9 production, Airbus’ advances are likely to intensify. Airlines are massively expanding their fleets to meet the post-pandemic surge in global air travel demand, and are considering which carrier to turn to.

Shares of Airbus, the consortium with factories and offices in several European countries, hit a record high on Friday after its Chief Executive Guillaume Faury said the company had won 2,094 orders for new planes in 2023, the most in a year. This includes the popular single-aisle A320neo aircraft, the main competitor to the 737 Max.

Boeing too informed of There will be more aircraft deliveries and orders in 2023 than last year, but at a slower pace than Airbus. Together the two companies manufacture most of the world’s commercial jets.

Mr Faurie declined to comment directly at a news briefing on Thursday on the latest problem with Boeing’s MAX aircraft. “We are following very closely everything that emerges from the ongoing investigation,” he said.

Airbus has had its own problems: During the pandemic, supply chain issues forced it to cut production and lay off employees, causing a loss of 1 billion euros ($1.1 billion). It settled a corruption investigation in 2020 for €4 billion. And in 2019 it abandoned production of the A380 superjumbo jet after airlines demanded smaller models.

Since the Jan. 5 incident with the Max 9, Boeing’s shares have fallen nearly 20 percent as investors gauge how big a blow the debacle will prove to be. The company’s chief executive, David Calhoun, said he expected 2024 to be a comeback year. Instead, the company is struggling to prevent new consequences.

Boeing said Monday it would make changes to quality-control procedures at its factory and at a key supplier, Spirit AeroSystems, which installed the plugs for the unused exit doors that malfunctioned on the Alaska Airlines flight. On Tuesday, Boeing announced it had hired Kirkland H. Donald, a retired Navy admiral, to assess the company’s “quality management system” for commercial aircraft.

While no one was injured, the Alaska Airlines episode revived questions about safety, which Boeing had been working to address after two of its Max planes crashed in Asia and Africa in 2018 and 2019 , in which 346 people were killed. All 737 Max planes worldwide were grounded for two years, creating an unusual opportunity for Airbus to capture more of Boeing’s business.

Reporting from the New York Times and others revealed that there was pressure inside Boeing to compete with Airbus’s A320neo jet, a fast-growing, fuel-efficient breakthrough that irked Boeing. Boeing’s decision to build the MAX as a variation of the 737 because it would be faster, easier, and cheaper than starting from scratch influenced the design and development of the aircraft, which played a role in its troubled history. Played.

“The economic equation has changed in Airbus’ favor over the past few years,” said Philip Buller, an aviation analyst at London-based Berenberg Bank.

“The disruptions affecting the Boeing Max have made it a less reliable aircraft in your fleet,” he said. “So the advantages of it being a little cheaper are offset because the Airbus is a more reliable plane that you can fly rather than grounding.”

Safety concerns have been costly for Boeing in other ways. The company is saddled with nearly $40 billion in debt due to the Covid travel downturn and the first 737 Max safety crisis. Mr Buller said this raised questions about the extent to which it would invest in future-generation aircraft as Airbus seeks competitive leadership.

He said, “If you have $40 billion in debt and your airplane, which is your source of cash, is grounded because the door is blown off, that’s a sign that management is not investing in the future, but Just trying to put out the fire today.”

As airlines increase aircraft orders after the pandemic to build larger and new fleets, Airbus appears to be expanding its lead. In two major deals, Air India ordered 250 Airbus aircraft, and IndiGo, India’s largest carrier, agreed to buy 500. The company reported an order backlog of 8,600 planes through 2023, compared with 5,626 for Boeing.

Supply chain issues have made it difficult for both to produce the aircraft faster. Airbus delivered 661 aircraft to carriers and airline leasing companies in 2023, slightly below its target but more than the 480 delivered by Boeing. Airbus’s single-aisle jets are sold out by the end of this year and its wide-body A350 planes by 2028, the company said.

Global airline fleet is expected with will increase by one third in the next decade – The carriers expect to operate 36,000 aircraft by 2033, up from about 27,400 commercial jets today – with both companies looking to increase volumes for the long term.

Mr Faury said Airbus would increase A320neo production to 75 jets per month in 2026 to overtake its rival. Boeing plans to increase production of 737 jets to 50 per month by 2025.

For now, Airbus remains modest, at least publicly.

Three days before the Alaska Airlines incident, a Japan Airlines Airbus A350 burst into flames after colliding with a coast guard plane while landing in Japan. The design and materials of the Airbus were credited with preventing passengers and crew members from being injured by the fire.

and Spirit AeroSystems, which made the Boeing door plug. is also a major supplier For many types of Airbus aircraft. It makes wing parts for the A320 at a plant in Scotland, and central section panels for the A350’s fuselage at its North Carolina plant. Mr Faury said Airbus was closely following the US regulatory investigation into Boeing and its suppliers.

He dismissed concerns that the race between Airbus and Boeing to build more sought-after jets in the coming years could harm quality, saying safety, integrity and compliance were core pillars of the company.

“We are all very focused on our product, on understanding, analyzing and learning all the lessons,” Mr. Faury said during a separate appearance at a French aerospace gathering last week, following the Alaska Airlines and Japan Airlines incidents. “

“We always ask ourselves the question: What does this say about the precautions we may not have thought about and that we need to think about?” Mr Fourie said. “To what extent can this happen to us?”

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