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http://en.wikipedia.org/wiki/Competition_between_Airbus_and_Boeing

Competition between Airbus and Boeing is a result of the two companies' domination of the large jet airliner market since the 1990s, which is itself a consequence of numerous corporate failures and mergers within the global aerospace industry over the years. Airbus began its life as a consortium, whereas Boeing took over its former arch-rival, McDonnell Douglas, in 1997. Other manufacturers, such as Lockheed, Convair in the US and Dornier and Fokker in Europe, have pulled out of the civil aviation market after disappointing sales figures and economical problems, while the collapse of the Eastern Bloc and their trade organization Comecon around 1990 has put the former Soviet aircraft industry in a disadvantaged position, although Antonov, Ilyushin, Sukhoi, Tupolev and Yakovlev still manufacture planes. All this has left Boeing and Airbus in a near-duopoly in the global market for large commercial jets comprising narrow-body aircraft, wide-body aircraft and jumbo jets. However, Embraer has gained market shares with their narrow-body aircraft in the Embraer E-jets series.

In the decade between 1999 and 2008 Airbus received 6,378 orders, while Boeing received 6,140, and they fight for the best commercial figures every year. The competition between the two companies is intense, and each company regularly accuses the other of receiving unfair state aid from their respective governments.

Competition by product

Range overlap

Though both manufacturers have a broad product range in various segments from single-aisle to wide-body, both manufacturers' offerings do not always compete head-to-head; instead as listed below they respond with models a bit smaller or a bit bigger than the other in order to plug any holes in demand and achieve a better edge.

• The A380, for example, is substantially bigger than the B747.
• The A350 XWB competes with the high end of the B787 and the low end of the B777.
• The A320 is bigger than the 737-700 but smaller than the 737-800.
• The A321 is bigger than the B737-900 but smaller than the previous B757-200.
• The smaller A330-200 competes with the B767-300ER.

Airlines can use this as a benefit since they get a more complete product range from 100 seats to 500 seats than if both companies offered identical aircraft.

Passengers/range km (statute miles) for all models

Airbus A320 vs Boeing 737

Airbus A330 and Airbus A340 vs Boeing 767 and Boeing 777

Airbus A350 XWB vs Boeing 787 and 777

Airbus A380 vs Boeing 747

Cross-section comparison of Airbus A380 versus Boeing 747-400

The widebody 747-8, as the current new development of Boeing's largest airliner, is notably in direct competition on long-haul routes with the A380, a full-length double-deck aircraft now in service. For airlines seeking very large passenger airliners, the two have been pitched as competitors on various occasions. Following another delay to the A380 program in October 2006, FedEx and UPS canceled their orders for the A380-800 freighter. Some A380 launch customers deferred delivery or considered switching to the 747-8 and 777F aircraft.

So far (April 2009) no airline has canceled an order for the passenger version of the A380. A380 performed far better than 747-8I in the actual market. Boeing is considering cancelling the 747-8I as Lufthansa is the sole commercial airline that ordered it (20).

A330 MRTT - KC-45A

In March 2008 the announcement that Boeing had lost a $40bn contract to Airbus to build parts for the new in-flight refuelling aircraft KC-45A for the USAF drew angry protests in the US Congress. Later, the entire competition was first rescheduled, then canceled, with a new competition expected to be decided by March 2010.

EADS A330 MRTT - Northrop Grumman KC 45 A versus Boeing KC-767

Data is preliminary and partially copied from A330-200 and 767-200ER.

Competition by outsourcing

Because many of the world’s airlines are either wholly or partly government owned, aircraft procurement decisions are often taken according to political as well as commercial criteria. Boeing and Airbus seek to exploit this by subcontracting production of aircraft components or assemblies to manufacturers in countries they deem to be strategically important in order to gain competitive advantage.

For example, Boeing has offered longstanding relationships with Japanese suppliers including Mitsubishi Heavy Industries and Kawasaki Heavy Industries by which these companies have had increasing involvement on successive Boeing jet programs, a process which has helped Boeing achieve almost total dominance of the Japanese market for commercial jets. Outsourcing was extended on the 787 to the extent that Boeing’s own involvement was reduced to little more than an assembly and test operation.

Partly because of its origins as a consortium of European companies, Airbus has had fewer opportunities to outsource significant parts of its production beyond its own European plants. However, in 2009 Airbus has opened an assembly plant in Tianjin, China for production of its A320 series airliners.

Competition through use of technology

One of the ways Airbus sought to compete with the well-established Boeing in the 1970s was through the introduction of advanced technology into its products. For example, the A300 made the most extensive use of composite materials yet seen in an aircraft of that era, and by automating the flight engineer's functions, was the first large commercial jet to have a two-man flight crew. In the 1980s Airbus was the first to introduce digital fly-by-wire controls into an airliner (the A320).

Now that Airbus has established itself as a viable competitor to Boeing, both companies use advanced technology to seek performance advantages in their products. For example, the Boeing 787 will be the first large airliner to use composites for most of its construction, followed soon by the Airbus A350.

Competition through provision of engine choices

The competitive strength in the market of any airliner is considerably influenced by the choice(s) of engine available. In general, airlines prefer to have a choice of at least two engines from the major manufacturers General Electric, Rolls-Royce and Pratt & Whitney. However the engine manufacturers clearly prefer to be single source, and sometimes succeed in striking commercial deals with Boeing and Airbus to achieve their objective. Hence several notable aircraft have only provided a single engine offering: the Boeing 737-300 series onwards (CFM56), the Airbus A340-500 & 600 (Rolls-Royce Trent 500), the Airbus A350 (Rolls-Royce Trent XWB - so far) and the Boeing 747-8 (GEnx-2B67).

Orders and deliveries

Orders

	2009	2008	2007	2006	2005	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995	1994	1993	1992	1991	1990	1989
Airbus	11	777	1341	824	1111	370	284	300	375	520	476	556	460	326	106	125	38	136	101	404	421
Boeing	7	662	1413	1044	1002	272	239	251	314	588	355	606	543	708	441	125	236	266	273	533	716
Sources 2009: Airbus net orders until May 31: http://www.airbus.com/en/corporate/orders_and_deliveries/ Boeing net orders until June 9. http://active.boeing.com/commercial/orders/index.cfm

Deliveries

	2009	2008	2007	2006	2005	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995	1994	1993	1992	1991	1990	1989
Airbus	205	483	453	434	378	320	305	303	325	311	294	229	182	126	124	123	138	157	163	95	105
Boeing	201	375	441	398	290	285	281	381	527	491	620	563	375	271	256	312	409	572	606	527	402
Sources 2009: Airbus deliveries until May 31: http://www.airbus.com/en/corporate/orders_and_deliveries/ Boeing deliveries until May 31. http://active.boeing.com/commercial/orders/index.cfm?content=displaystandardreport.cfm&optReportType=CurYrDelv

Boeing's Product Plan

Since the 1970s Boeing has faced increasing competition from Airbus which has expanded its family of aircraft to the point where it now markets aircraft to rival most Boeing products. Indeed, Airbus is now competing in markets that Boeing once dominated, and in 2003 delivered more planes than Boeing for the first time - and has done so every year since. Boeing won more orders in 2006 and 2007, while Airbus won a greater share of orders in 2001 - 2005 and 2008. In 2005 Airbus won more orders by number but Boeing won 55% by value. In summary of the last 10 years 1999-2008 Airbus won 6378 orders while delivering 3606, Boeing won 6140 orders while delivering 4089.

The A320 has been selected by 222 operators (Dec. 2008), among these several low-cost operators, gaining ground against the previously well established 737 in this sector; many full-service airlines also have selected it as a replacement for 727's and aging 737's, such as United Airlines and Lufthansa; and after 40 years the A380 now challenges the Boeing 747's dominance of the very large aircraft market. The 747-8 is a stretched and updated version of the venerable 747-400 and will offer greater capacity, fuel efficiency and longer range. Frequent delays to the Airbus A380 program caused several customers to consider cancelling their orders in favour of the refreshed 747-8, although none has done so and some have even placed repeat orders for the A380. However, all A380F orders have been canceled. To date, Boeing has secured orders for 78 747-8F and 28 747-8I with first deliveries scheduled for 2010 and 2011 respectively, while Airbus has orders for 202 A380s, the first of which entered service in 2007.

Several Boeing projects were pursued and then canceled, like the Sonic Cruiser, launched in 2001. Boeing is now focused on the 787 Dreamliner as a platform of total fleet rejuvenation, which uses technology from the Sonic Cruiser concept. Despite having been delayed by about two years, the 787 is the fastest selling wide body airliner in history. The 787's rapid sales success and pressure from potential customers forced Airbus to revise the design of its competing A350, so it still lags behind in development and orders.

In 2004, Boeing ended production of the 757 after 1055 were produced. More advanced, stretched versions of the 737 were beginning to compete against the 757, and the proposed 787-3 will fill some of the top end of the 757 market. Also that year, Boeing announced that the 717, the last civil aircraft to be designed by McDonnell Douglas, would cease production in 2006. The 767 was in danger of cancellation as well, with the 787 replacing it, but recent orders for the freighter version have extended the program and the uncertainty of the deliveries of the 787 also prolongs the deliverance. Last but not least, the passenger version of the Boeing 747-400 ceased production on March 17, 2008. However, the freighter version will remain in production until the first delivery of the 747-8F.

Recently, Boeing launched five new variants of existing designs: the ultra-long-range 777-200LR, 737-900ER, 737-700ER, 777 Freighter and the 747-8. The 777-200LR has the longest range of any commercial aircraft and was designed to compete with the Airbus A340-500. It was first delivered in 2006. The 737-900ER and 737-700ER are the extended range variants of the -900 and -700 models. Due to rising fuel costs, the more efficient twinjet 777 has been winning orders at the expense of the four-engined Airbus A340.

There are around 5,417 (April 30, 2009) Airbus aircraft in service, with Airbus managing to win over 50 per cent of aircraft orders in recent years. Airbus products are still outnumbered by in-service Boeings (there are about 4,495 Boeing 737s alone in service, about 13,000 total). This however is indicative of historical success - Airbus made a late entry into the modern jet airliner market (1972 vs. 1958 for Boeing).

Safety

Both aircraft manufacturers have enjoyed very good safety records on their late-model aircraft. By convention, both companies tend to avoid safety comparisons when selling their aircraft to airlines. That being said, aircraft such as the Airbus A340 and Boeing 777, both introduced during the 1990s and 2000s, have never had any fatal accidents. Most of the other aircraft which dominate the companies' aircraft sales, such as the Boeing 737-NG and Airbus A320 families (as well as both companies' wide-body offerings) have very good safety records as well. Older model aircraft such as the Boeing 737 Original, Airbus A300 and Airbus A310, which were respectively first flown during the 1960s, 1970s, and 1980s, have had higher rates of fatal accidents.

Controversies

The Boeing 787 (above) will compete with the Airbus A330 and the Airbus A350 on the medium to long range market.

Subsidies

Boeing has continually protested over launch aid in form of credits to Airbus, while Airbus has argued that Boeing receives illegal subsidies through military and research contracts and tax breaks.

In July 2004 Harry Stonecipher (then-Boeing CEO) accused Airbus of abusing a 1992 bilateral EU-US agreement providing for disciplines for large civil aircraft support from governments. Airbus is given reimbursable launch investment (RLI, called "launch aid" by the US) from European governments with the money being paid back with interest, plus indefinite royalties if the aircraft is a commercial success. Airbus contends that this system is fully compliant with the 1992 agreement and WTO rules. The agreement allows up to 33 per cent of the programme cost to be met through government loans which are to be fully repaid within 17 years with interest and royalties. These loans are held at a minimum interest rate equal to the cost of government borrowing plus 0.25%, which would be below market rates available to Airbus without government support. Airbus claims that since the signing of the EU-U.S. agreement in 1992, it has repaid European governments more than U.S.$6.7 billion and that this is 40% more than it has received.

Airbus argues that the pork barrel military contracts awarded to Boeing (the second largest U.S. defense contractor) are in effect a form of subsidy (see the Boeing KC-767/EADS KC-45 military contracting controversy). The significant U.S. government support of technology development via NASA also provides significant support to Boeing, as does the large tax breaks offered to Boeing which some claim are in violation of the 1992 agreement and WTO rules. In its recent products such as the 787, Boeing has also been offered substantial support from local and state governments.

In January 2005, the European Union and United States trade representatives, Peter Mandelson and Robert Zoellick (since replaced by Rob Portman) respectively, agreed to talks aimed at resolving the increasing tensions. These talks were not successful with the dispute becoming more acrimonious rather than approaching a settlement.

World Trade Organization litigation

Portman (from the USA) and Mandelson (from the EU) issued a joint statement stating: "We remain united in our determination that this dispute shall not affect our cooperation on wider bilateral and multilateral trade issues. We have worked together well so far, and intend to continue to do so."

Tensions increased by the support for the Airbus A380 have erupted into a potential trade war due to the upcoming launch of the Airbus A350. Airbus would ideally like the A350 programme to be launched with the help of state loans covering a third of the development costs although it has stated it will launch without these loans if required. The A350 will compete with Boeing's most successful project in recent years, the 787 Dreamliner.

EU trade officials are questioning the funding provided by NASA, the Department of Defense (in particular in the form of R&D contracts that benefited Boeing) as well as funding from US states (in particular the State of Washington, the State of Kansas and the State of Illinois) for the launch of Boeing aircraft, in particular the 787.

See also

• Boeing
  • Boeing Commercial Airplanes
• EADS
  • Airbus
• Comparison of commercial aircraft

External links

• Official Airbus Website
• Official Airbus Military website
• Complete production lists of all Airbus models
• Official Boeing Website
• Seatguru: Airplane seating chart for many Airlines and Boeings, Airbusses and others
• BBC Q&A: Boeing and Airbus

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Published in July 2009.

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