Airbus and Boeing: The Commercial Aviation Duopoly

Airlines have a very heavy reliance on Airframe manufacturers. The type of planes they manufacture and more importantly, the costs, plays a significant role in how the business can grow. Therefore it becomes absolutely essential for the airline industry to have multiple options to buy and negotiate from. The last things they would want is to be at the mercy of one giant supplier dictating the type of aircraft they buy, and the price they charge.

This is exactly where things seem to be headed in the mid-1970s. There were three main manufacturers to deal with – Boeing, Lockheed and Douglas, giving the airlines reasonable options. However, Boeing had launched a series of successful jets with the 707, 727, 737 and landed a killer blow with the 747, the only successful option for the mass travel long haul market.

Boeing 707

Boeing 727

Boeing 737

Boeing 747

Lockheed, after a few successful years had entered it competitors for the 747 in the form of the L-1011 Tristar, but problems with Rolls Royce, its sole engine supplier, all but destroyed this potentially very successful trijet. Production only lasted till 250 aircraft.

Lockheed L-1011 Tristar

Meanwhile Douglas (soon to be known as McDonnell Douglas), who had to a certain extent kept pace with Boeing, with its DC-8 (competing with 707) and DC-9 (competing with 727 and 737) launched its long haul contender in the form of the DC-10, an aircraft that began with serious safety issues, and never quite managed to compete. Production only lasted 386 aircraft and 60 tankers. The DC-10s moved to a freighter role far earlier than it should. Its successor, the beautiful MD-11, intended to take on the 747-400, didn’t fare well either and only 200 were made. They also moved to a freighter role very early in their career. It was the last of the tri-jets produced.

 

 

 

 

 

 

Douglas DC-8

Douglas DC-9

McDonnell Douglas DC-10

That left Boeing with a 62% market share of all aircraft produced in the 1970s, and two competitors is steep decline. Lockheed would never come near commercial aviation and McDonnell Douglas never ever managed to seriously compete with Boeing again and was eventually acquired by Boeing in 1997.

The Russian manufacturers – Ilyushin and Tupolev, though adept at making large airplanes in high volumes, were never in contention outside the Soviet controlled block. That potentially left Boeing as the sole aircraft supplier. And the risk was evident as the Boeing 747, without competition, was sold at minimum discount percentages, sometime as high as 85% of its list price. (Although this information is never disclosed, large airline scan expect a discount of 40% to 50% on list price from manufacturers).

Therefore the emergence of Airbus in the early 1970s, and its ability to compete with Boeing has been a huge blessing for the airline industry. Airbus was formed as a partnership between manufacturers in France, Germany, the UK and Spain, who knew they could not take on the Big Three alone. This complicated consortium launched the Airbus A300, a medium range wide body airliner that successfully competed with Lockheed Tristar and the McDonnell Douglas DC-10, and along with its longer range derivative, the Airbus A310 took on Boeing's successful duo – 757 and 767. While the Boeing jets were far more successful, with 1,050 757s and 1,083 767s (still in production with about 80 yet to be delivered as of February 2016) Airbus still managed to produce 561 A300s and 255 A310s. They even managed to crack the US market getting A300 and A310 orders from the now dying but iconic Pan American in its last days.

Airbus A300

Airbus A310

Boeing 757

Boeing 767

Competition got more serious when Boeing seemingly relaxed a bit from the mid-1980s to the mid-1990s, and did not launch a new plane. Airbus took this opportunity to roll out it’s first serious contender, the Airbus A320, which would directly take on Boeing’s most successful product to date, the 737. With Boeing’s persistence on retaining and refining what was essentially an old design, Airbus’s white paper approach became more popular. While more 737s have been delivered than A320s, the A320 (and its family – A318, A319 and A321) has been matching orders since launch in 1988. The orders and deliveries for the A320 family from launch in 1988 to February 2016 stand at 7,953 (1,061 yet to be delivered), while 13,297 737s have been ordered since its launch in 1967 (4,417 yet to be delivered). The updated A320neo is outselling the 737 MAX though by 4,508 to 3,072 orders as on February 2016. The A320 has also firmly established Airbus in the US, with airlines who had been loyal Boeing customers replacing 737s with the A320.

Airbus A320

Boeing 737-300

The competition from the mid-1990s has been relatively even. Airbus launched the A330, which successfully competed with the 767, while Boeing fought back with the 777, an absolute marvel of an aircraft, that never allowed its Airbus competitor, the A340, to come even close to competing. 

Boeing 777-200

Airbus A330

Airbus A340

Airbus then went to the mass travel market, launching the A380, which can carry 850 passengers if taken all economy. While marginally successful, has made the 747s latest derivative – 747-8i, even less successful.

Airbus A380

Boeing 747-8i

Both manufacturers are now fighting head to head in the carbon fibre age, with the Boeing 787 and the Airbus A350, both with huge order books and matching performance statistics.

Boeing 787

Airbus A350

This is the competition that the airlines want, and it’s essential for them to be able to play Airbus v Boeing to get the best deals.

The A320 and 737 market is beginning to see competition from the regional jet manufacturers Embraer and Bombardier, which gives airlines more options. The Russians, with the Sukhoi Superjet 100, and the Japanese, with their planned Mitsubishi Regional Jet are also launching short range contenders. And there is China, which has kept quiet so far, but has created COMAC (Commercial Aircraft Corporation of China) with ambitious programs to launch a full range of competitors for all, the narrow-body, short range C919, and the wide-body, long range C929 and C939. 

Embraer ERJ 190

Bombardier CRJ1000

Sukhoi Superjet 100

COMAC C919

Boeing and Airbus both have an answer though, and that is in the form of the recently launched and much improved versions of the their bread and butter 737 and A320 program: the Airbus A320neo and the Boeing 737 MAX.

However, with the duopoly beginning to break after so many years, Airbus and Boeing may have a lot more to worry about in the next decade. And the airlines must be looking forward to it.

Airbus A320neo

Boeing 737 MAX

This article is based on personal research done out of interest for this subject and represents only my opinion. I would be happy to know your views and thoughts on this.

Reference: Boeing versus Airbus – John Newhouse