Boeing Versus Airbus in Asia

Aircraft Carrier Company Boeing Number One in China

Jul 31, 2007

Success at Boeing, and continued production and design problems at Airbus, means China leads Asian airlines in the operation and purchase of numbers of Boeing Aircraft

The Boeing Aircraft Corporation and its Chinese ally have defeated Europe’s Airbus.

According to internal Boeing reports: “As of March 2007, 628 or 60 percent of the 1055 commercial jetliners operating in China were Boeing airplanes…320 or 30 percent were Airbus, and 107 or 10 percent were from other manufacturers….” Those numbers give Boeing a strong 2:1 advantage over Airbus in China; however, there is much more to this data than is readily apparent.

Raw numbers of aircraft and sales orders, while a measure of performance, do not tell the complete story. If you sell cars, homes or airplanes and compare one manufacturer to another the examiner must look at similar products to make a complete evaluation. If one car maker sells 10 cars and another sells 8 you must look further. The first maker may have sold 10 small cars where the 8 vehicles sold by the other manufacturer were luxury Rolls Royce, Ferraris or Lamborghinis.

In aircraft it is the same and this is exactly what makes Boeing and Airbus excellent competitors. There are a number of similar categories of aircraft for the two manufacturers: small (Boeing B-737 verses Airbus A-320), midsize (Airbus A-310 verses Boeing B-767) and large (Boeing B-747/B-777 and Airbus A-330/A-340). However, one of the best measures to gage aircraft manufacturer performance is new orders for new aircraft types. The gamble for a manufacturer in this area is great and when airlines order your aircraft, verses your competitor’s aircraft, the industry is giving that manufacturer a vote of confidence. In this area you have the Airbus A-380, A-350 and Boeing B-787. The A-380 is used to compete with a model Airbus has been unable to make significant in-roads into in the past (the Super Jumbo B-747) and its problems are exasperating Airbus. This problem for Airbus will be discussed in a different article; now we will examine the A-350 verses the B-787.

John Leahy, Sr. Sales Manager Airbus, “went on to make one of his famously audacious predictions: that Airbus will secure more than 280 [A-350] orders.” Yet according to Stanley Holmes’ July 9th Business Week article Boeing’s firm sales have been to “…47 customers that have ordered a record 677 Dreamliners.” Optimistically Airbus expects to sell 280 compared to Boeings firm orders for 677 aircraft – a significant difference between hope and have.

Why Boeings for China & Asia

According to China's People’s Daily Online Newspaper “Boeing received 120 orders from China last year. With the 80-aircraft orders and an additional 20 booked in January, we are well on our way to achieving the same volume as we did last year," said Rob Laird, vice-president of China sales for Boeing Commercial Airplanes. "We hope to maintain our market share of 60 to 65 per cent in China."

In December, three major Asia-Pacific carriers took orders for more than 100 wide body jets worth an estimated $16.8 billion. Boeing supplied most of the planes and therefore, secured its position in the wide body market in Asia for the remainder of the decade.

Asian airlines, especially in China, are still heavily regulated by their government. Boeing for 3 decades has had large manufacturing facilities in the Pacific Rim. Most of Boeing’s aircraft have significant components manufactured in China. According to Liu Xian, chief pilot of China Southern Airlines "Chinese aircraft manufacturers played an important role in the production of the Boeing 787 'Dreamliner'." Only recently has Airbus decided to do the same as Boeing and as a result Asian airlines and corporations have a long term vested interest in Boeing aircraft. Buy a Boeing; keep your good paying job! Not to slight Boeing, for they make great planes and Airbus is a managerial mess, but Boeing definitely has an advantage when all else is equal.

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The copyright of the article Boeing Versus Airbus in Asia in Commercial Aviation is owned by Frank W. Hardy. Permission to republish Boeing Versus Airbus in Asia in print or online must be granted by the author in writing.