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Commercial aircraft maker Airbus remains humble even as Boeing falters. There’s a reason for that

Frankfurt, Germany — In the latest round of their decade-long battle for commercial aircraft supremacy, Europe’s Airbus has carved out a clear sales lead over Boeing, even before the American company faced further fallout from manufacturing problems and ongoing safety concerns.

Airbus has overtaken Boeing in aircraft orders and deliveries for five straight years and just reported a 28% quarterly net profit increase. The company was already gaining market share by beating Boeing and developing a range of fuel-efficient, midsize aircraft that are cheaper Airlines fly.

And now Boeing is facing a government-imposed production cap on its best-selling aircraft.

Still, aviation analysts say the European company is unlikely to extend its lead in the Airbus-Boeing duopoly much further, despite customers clamoring for more commercial aircraft. The reason: Airbus is already building aircraft as quickly as possible and has a backlog of more than 8,600 orders to be fulfilled.

According to Jonathan Berger, managing director of Alton Aviation Consultancy, its ability to exploit Boeing’s problems is therefore “very limited”. Due to strained supply chains and long lead times for an extremely complex and highly regulated product, an aircraft ordered from Airbus today may not arrive until the end of the decade.

Boeing also has a huge order backlog for more than 5,660 commercial aircraft. The mismatch between post-COVID demand for flights and aircraft supply is bad news for travelers and airlines.

“This has been an incredibly strong market recovery, and people need more jets than they’re getting,” said Richard Aboulafia, managing director at AeroDynamic Advisory. “And until they get those jets, you don’t have enough capacity. Guess what goes up? Ticket prices.”

Earlier this year, Boeing appeared to finally be recovering from two Max jet crashes in 2018 and 2019 that killed 346 people in Indonesia and Ethiopia. Then, on Jan. 5, a door plug exploded on an Alaska Airlines 737 Max 9, and the company has been reeling ever since.

Boeing has since slowed production on US orders Federal Aviation Administration. The company lost $355 million in the first quarter due to declining aircraft deliveries and compensation it paid airlines for temporarily grounding Max 9s. The Max was Boeing’s answer to Airbus’ A320 family of aircraft.

Airbus, which is registered in the Netherlands but is headquartered in France, adopts a strikingly cautious and even humble attitude towards his recent success and the woes of his competitor. CEO Guillaume Faury said he was “not happy” about Boeing’s problems and that they were not good for the industry as a whole.

In a phone call with reporters on April 25, Faury was cautious about how much the company could speed up production even with 8.7 billion euros in cash on hand. Airbus is dealing with “a variety of challenges” in sourcing the parts it needs, he said, and needs to “ensure we ramp up at a pace that is compatible with the weakest suppliers.”

Faury emphasized that any steps to expand production would be done with “our cornerstones of safety, quality, integrity, compliance and security” in mind.

At Airbus and Boeing, production constraints exist in part because the two companies are less aircraft manufacturers and more “aircraft assemblers” that rely on thousands of parts from other companies, from fuselages and engines to electronics and interiors, Alton Aviation’s Berger noted. With “supply chains running as fast as they can,” Airbus is unable to step in and take over Boeing’s customers.

However, the European company scored a symbolic victory when United Airlines sought leases for 35 Airbus jets as Boeing faced delays in getting its new, larger Max 10s approved by U.S. regulators.

Given this: “Airbus is playing it well. They are very, very humble. It’s smart because they can’t take advantage of it,” Berger said.

With 2,094 net orders and 735 aircraft delivered, Airbus overtook Boeing for the fifth consecutive year last year. Boeing had 1,314 net orders and delivered 528 aircraft.

According to figures from Alton Aviation Consultancy, Airbus currently leads Boeing by 80% to 20% in sales of large single-aisle aircraft. The relationship between the smaller Airbus A320 and Boeing’s 737 Max 7 and Max 8 is more balanced; Airbus is ahead in terms of aircraft delivered, but Boeing has a lead of 54-46% when the European company’s order backlog is taken into account.

Airbus’ success isn’t just due to Boeing’s missteps. The company benefits from the decision to launch the A321neo, a single-aisle aircraft with 180 to 230 seats. “Neo” stands for “New Engine Option,” meaning highly efficient engines that save airlines money on one of their biggest costs. Boeing rushed to keep up with the Max, a 737 equipped with new, more efficient engines, but ran into problems with crashes and door jams.

Airbus also benefited from a deal to acquire Canadian manufacturer Bombardier’s smaller A220. Boeing has no competing product in this niche. Analysts say Airbus has another lead with the upcoming A321XLR, a model that will allow airlines to use cheaper narrow-body aircraft on long-haul flights.

Nevertheless, the company has already pushed back its deadline to produce 75 A320 and A321 jets per month from 2025 to 2026 and pushed back the promised delivery date for the A321XLR from the second quarter of 2024 to the third.

“Boeing is getting some orders because Airbus can’t deliver the planes,” said Scott Hamilton, managing director of consulting firm Leeham Company. “So Airbus really can’t gain much more market share because they’re sold out.”

The two companies’ current production pace means older, less fuel-efficient planes have to fly longer before being retired, leaving airlines unable to reduce their fuel costs. And older aircraft require more maintenance to fly further, which costs money but does not impact safety if properly maintained. For travelers, this means it will be more difficult to get discounted tickets.

Could another market player shake up the duopoly like Tesla did with cars? Not for the next few years, analysts said.

Brazil’s Embraer makes smaller regional aircraft and has not yet moved to compete with Boeing and Airbus. China’s COMAC has received more than 1,000 orders for its C919 narrow-body aircraft, but is “at least a decade or two” away from presenting a strong competitor, according to Berger.

This means that for now it remains a race between two companies – even if one of them performs below average.

“The airlines need at least two,” Berger said. “You don’t want to put yourself in a monopoly situation. That’s why everyone is cheering for Boeing to get its act together.”

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AP Airlines writer David Koenig in Dallas contributed to this story.

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