Description
1.As the battle “continues” between Boeing and Airbus – in your opinion, which manufacturer (Boeing or Airbus) will dominate commercial aircraft manufacturing in the next decade? WHY?2. What are your views on China’s C919? Given it is a single-aisle (narrowbody)commercial aircraft – could it ever be seen as a “threat” to the most lucrativeaviation sector (i.e., the “narrowbody”) for Boeing and Airbus? WHY or WHYNOT?I want your opinion; however, please support your opinion with a “set of facts.” Andfeel free to do a bit of additional research (fact-finding mission) on your own.
Unformatted Attachment Preview
AVED 4653: International Aviation
Case Study (due March 8, 2024)
“The International Manufacturing War”
Airbus and Boeing, as the two leading aircraft manufacturers, have made substantial
contributions to developing the global aviation industry. Airbus (headquartered in Europe)
and Boeing (based in the US) have introduced innovative aircraft models, pioneered
technological advancements, and catered to the evolving needs of airlines and passengers
worldwide.
The “competition” between Airbus and Boeing has been instrumental in driving innovation
and raising industry standards. Their rivalry has led to (1) developing more efficient aircraft,
(2) improving safety features, and (3) enhancing passenger experiences, ultimately benefiting
the global aviation industry.
Characterized as a duopoly (two suppliers dominate a specific market), the market share
between Airbus and Boeing has seen many fluctuations over the past 50 years, influenced by
factors such as (1) product demand, (2) economic conditions, and (3) geopolitical dynamics.
Airbus delivered their first aircraft, A300, to Air France in 1974. Since 1974:
Airbus total aircraft deliveries (1974-2023): 15,197
Boeing total aircraft deliveries (1974-2023): 21,418
During the past five years (2019-2023), Boeing has
delivered 1,885 total aircraft, whereas Airbus has
delivered 3,436 total aircraft. Also, during the past five
years: Boeing has received orders for 2,567 aircraft and
Airbus has received orders for 4,457 aircraft. As evident
in some of these aircraft numbers – both Airbus and
Boeing have experienced significant “changes” over the
decades because of (1) industry mergers and
consolidations, (2) new technologies, and (3) numerous
product delays and cancellations.
The “global demand” for commercial airplane demand is on the rise due to a steady
improvement in passenger demand. The major driver behind the increase in demand can be
attributed to growth in the single-aisle airplane (narrowbody) segment. In fact, this
segmental growth is backed by the global popularity of the low-cost carrier business model
and expansion of air service into emerging markets such as Asia, thereby compelling airlines
to accelerate the replacement of aged airplanes.
These single-aisle jets have been the main area of competition between Airbus and Boeing.
Currently, these two aerospace giants are pursuing the airline market with the updated
versions of their popular single-aisle jets – Boeing’s 737 MAX 10 against Airbus’ A321neo.
Boeing has forecasted that the world will need 42,600 new aircraft (worth $7.0 trillion) from
now until 2042. Boeing expects single-aisle jets to be the major driver behind demand
growth, comprising 73% of the total projection. This translates into the global demand for
31,100 single-aisle jets in the next two decades. Airbus has forecasted a demand for 40,850
new aircraft (worth $6.0 trillion) between now and 2042. And Airbus expects that 32,630
(80%) will be single-aisle jets.
Undoubtedly, Boeing and Airbus have “dominated” the commercial aerospace manufacturing
market, with major airlines worldwide using their airplanes. Nevertheless, over the past few
years, Chinese Commercial Aircraft Corporation of China (COMAC), which is “stateowned” and strongly backed by the Chinese government has been readying the COMAC
C919 for commercial service. The C919, a single-aisle aircraft, can accommodate 192
passengers and has a range of 3,500 miles.
The C919 made its first flight in May
2017. And in June 2023 – the C919 took
its first commercial flight, flying
passengers from Shanghai to Beijing for
China Eastern Airlines. This was a major
achievement, since the global aircraft
manufacturing industry has exceptionally
high barriers to entry, and no country or
new company has entered this market for
almost 50 years.
The C919 jet is a symbol of communist China’s ambitions to “muscle their way” into a global
jet market estimated to be worth $7 trillion over the next two decades. “Chinese” airlines are
expected to spend over $1 trillion on new commercial aircraft over the next two decades; so
obviously, China and COMAC will want a slice of the pie.
The C919 was designed to compete with the Boeing 737 MAX and Airbus 320neo family.
China’s COMAC will now effectively be the third option in the market for commercial
aircraft planes with more than 150 seats. China has made no secret of its ambition for
COMAC to eventually “compete” against Boeing and Airbus on the world stage.
The Chairman of COMAC stated in September 2023 that the manufacturer already has over
1,000 orders/options for the C919 (from their own domestic airlines). And even though,
COMAC has only delivered four C919s in two years – the Chinese government is expecting
COMAC to produce and deliver 150 C919s every year.
The two giants of the aviation manufacturing industry have been going head-to-head with
one another every year for the past decades. During the past 30 years, Boeing and Airbus
have consistently traded the “crown” in the fiercely competitive $220 billion commercial
aircraft market.
For decades now, Boeing and Airbus have had the global manufacturing market for
commercial jets largely to themselves. Perhaps (?) that could all change according to China.
China’s aviation sector is the second largest in the world, only after the US, and in the coming
years the Chinese aviation market is expected to continue to grow – eventually surpassing the
American market. So, one would only expect that the overall objective of the Chinese
Government is to reduce their “dependence” on foreign aircraft manufacturers namely Boeing
and Airbus.
Questions:
1. As the battle “continues” between Boeing and Airbus – in your opinion, which
manufacturer (Boeing or Airbus) will dominate commercial aircraft
manufacturing in the next decade? WHY?
2. What are your views on China’s C919? Given it is a single-aisle (narrowbody)
commercial aircraft – could it ever be seen as a “threat” to the most lucrative
aviation sector (i.e., the “narrowbody”) for Boeing and Airbus? WHY or WHY
NOT?
I want your opinion; however, please support your opinion with a “set of facts.” And
feel free to do a bit of additional research (fact-finding mission) on your own.
Purchase answer to see full
attachment
