Boeing Vs. Airbus - Two Of The World's Largest Aerospace Manufacturer

       

VS.

Aerospace manufacturer can be defined as a company which involved in different aspects of designing, building, testing, selling and maintaining aircraft, aircraft parts, missiles and spacecraft.

The top five aerospace suppliers are United Technologies, GAE Aviation, Safran, Rolls-Royce Holdings and Honeywell Aerospace.

While there are other aerospace manufacturers in the world, the two largest are Boeing and Airbus.

Boeing has been dominating in sales of aircraft, world wide for decades until Airbus joined in 1972. But Airbus only established its status as a force in the aircraft market in 1987. This was made possible by the launch of its A320 model – in which 400 of the aircraft were sold before it first flew, as compared to 15 of A300 model sold in 1972. Before Airbus gained a foothold in the aircraft market, Boeing were competing with McDonnell Douglas and Lockheed – its American rivals.

Airbus had analysed and concluded that a number of factors could explain the dominant position of the American manufacturers. Air transport was the favoured means of travel due to United States land mass, a 1942 Anglo-American agreement gave air transport production to the United States and also, the world war 11 had left United States’ aeronautical industry in a profitable and powerful position. Airbus were determined to do something.

They understood that a collaboration was needed to manufacture an aircraft and a brand strong enough to compete with a more powerful US manufacturers. European aircraft manufacturers accepted the collaboration with their governments involved because of the risks that could arise in such collaboration. Four European manufacturers, with the backing of their government, came together and formed Airbus. The French company, Aerospatiale and West Germany’s Deutsche Airbus were the majority shareholders, British company, Hawker Siddeley had 20% and the Dutch company, Fokker VFW had 7%. Then, in October 1971, Spanish company, CASA acquired 4.2% shares from Aerospatiale of France and Deutsche Airbus of West Germany. Hawker Siddeley was later bought by British Aerospace.

Airbus A300 was the first model to be manufactured and marketed. The cockpit, flight control and the lower center section of the fuselage was to be manufactured by France. West Germany was given the upper center section, forward and rear fuselage section to manufacture. The Dutch were to make the flabs and spoiler while Hawker Siddeley took its turn to manufacture the wings. Spain were assigned the horizontal tailplane to make. This is how Airbus, Europe’s largest aircraft manufacturer started. With this fresh competition from Europe, sure, it was not going to be business as usual for Boeing. How did Boeing respond? Read on.

In 2000, DaimlerChrysler which had taken over Deutsche Airbus, emerged with other shareholding companies to become EADS, leaving only British Aerospace as the other share holder. The British Aerospace, after a successful merging with Marconi Electronic Systems, became known as BAE Systems. Thus, Airbus France, Airbus Germany, Airbus Spain were now owned by EADS, which was 80% of Airbus industry and with the remaining 20% owned by BAE Systems. In 2006, BAE Systems sold its stake to EADS for $3.53 billion.

Boeing, the first human being walked on the moon on 20th July, 1969 and Boeing played a lead role in that Apollo 11 mission. But now, with stiff competition from heavily subsidized Airbus and McDonnell Douglas, it was time to take hold of the future. In respond to McDonnell Douglas’s MD model series and Airbus’s 300 model series, Boeing manufactured two new passenger jet models – the 757 and the wide-body 767, utilizing advanced technology and improved engines. These models were also fuel-efficient than the previous models- Boeing response to the 1970s oil shortages. Before the company developed these models, there were growing concern over aircraft noise and these new models handled that.

Every year, competition for airplane orders increased, especially from Airbus consortium. In a move to further strengthen their position as a major player both in aerospace and in defense, Boeing bought the aerospace and defense holdings of Rockwell International for $3.2 billion in December 1996. Rockwell’s International contracts for space shuttle engines, Rockets, missiles, military airplanes, satellites, etc were transferred to Boeing. Also in a similar move, Boeing acquired McDonnell Douglas for $14 billion in August 1997. By this time, McDonnell Douglas was world number three commercial airliner manufacturer with its MD series of jetliners – only behind Boeing in first and Airbus in second. With these two major acquisitions, Boeing became the undisputed world number one manufacturer of commercial jetliner and military aircraft – with 60% of the commercial airliner market share. And it was Boeing’s military airplane called “B-29 Super Fortress” that the US military used to drop the atomic bombs on Hiroshima and Nagasaki in August 1945.

This did not in anyway stop Airbus from competing – they kept competing at the highest level possible. In fact, it was because they never gave up hope of doing their thing, when Boeing slipped for the first time in 2003, Airbus took advantage. After decades of success and dominance, Boeing lost ground to Airbus for the first time in 2003 and lost its lead in the airliner market that year. This was mainly because of the changes in commercial aviation market following the September 11 attack on United States. These changes affected Sonic Cruiser, Boeing’s latest airliner, designed to travel close to the speed of light, cutting intercontinental travel times by 20%. Due to this, several Boeing projects were canceled. The weak economy and increase in fuel prices of that time also affected the company impact in the market.

Boeing brushed the setback aside and forged on! The company turned its attention to a new model, the Boeing 787 Dreamliner, utilizing much of the technology developed for the Sonic Cruiser.

In 2005, Boeing gained back its lead in the airliner market by winning 55% of orders proportioned by value ahead of Airbus though Airbus achieved 1055 net orders as compared to 1002 by Boeing. In 2006, Boeing won more orders by both measures.

In 2016, Airbus made more sales than Boeing – a total of 731 jetliners were sold by Airbus compare to 668 jetliners sold by Boeing. Airbus new deal with Iran, which they sold 98 airplanes to them, allowed them to outpace Boeing. However, Boeing still made more money than Airbus in 2016 because they built more planes, most especially the higher priced large jets – a total of $61 billion made by Boeing in 2016 compare to $46 billion by Airbus.

The 2016 production gap has allowed Boeing to maintain its place as number one aircraft manufacturer. But Airbus could well pull ahead of them within few years with their planned production boost and Boeing’s cuts in 777 production. As Boeing will start selling to Iran, which side will make more sales in 2017? Stay tune.