Post-pandemic recovery to intensify Airbus-Boeing rivalry

Wan Lixin
When a China Southern Boeing 737 MAX took to the skies on a domestic flight on January 13, it was viewed as a milestone in the planemaker's attempt to rebuild its China business.
Wan Lixin

When a China Southern Airlines Boeing 737 MAX took to the skies on a domestic flight from Guangzhou to Zhengzhou on January 13, it was viewed by some as a major milestone in the US planemaker's attempt to rebuild its business in China.

The model was grounded in March 2019 after fatal crashes in Indonesia and Ethiopia. China, the world's second largest aviation market, is the last major market to resume the operation of the MAX, Boeing's best-selling model.

Prior to this development Boeing had said it had begun re-marketing 737 MAX planes originally intended for China to other carriers due to uncertainties over whether the Chinese airlines would accept them in the near term.

It will be interesting to observe how the rising aviation demand in the wake of the easing of COVID-19 controls in China will affect the global aviation market, particularly the already intense competition between Airbus and Boeing.

According to latest statistics, Boeing, still struggling to ramp up again after stoppages to its deliveries of the 737 MAX and the 787, remains well behind its European rival in production of aircraft.

Airbus is the No. 1 jetmaker for the fourth successive year.

According to reports, Airbus delivered 661 commercial aircraft to 84 customers in 2022 and registered 1,078 gross new orders, with Airbus' end December 2022 backlog standing at 7,239 aircraft.

Although the deliveries fell short of the planned deliveries of 700, they were satisfactory considering the effect of the pandemic, the Russia-Ukraine conflict, global supply chain disruptions, inflation, and labor shortages.

The achievement seems particularly flattering in comparison with the performance of its rival Boeing.

Boeing reported 774 commercial orders last year after cancellations and conversions, including 561 orders for the 737 family and 213 orders for the company's market-leading twin-aisle airplanes.

It delivered a total of 480 airplanes for 2022. While it was considerably lower than the 661 for Airbus, it was much better than the 340 airplanes Boeing delivered in 2021.

While Airbus got more orders for narrow-bodies, the two rivals were more or less matched in terms of the more profitable twin-aisle airplanes.

As a result of supply chain disruptions and labor shortages, Boeing has been having a hard time ramping up its manufacturing capacity.

Riding on its stellar performance in December, Boeing's share price soared to US$214 on January 14, representing a rally from the US$134 at the end of October, though still way lower than the price before the MAX accidents.

Chinese airlines' commitment would have a significant impact on the aviation market. While 112 of Airbus' 661 deliveries last year were for Chinese airlines, the corresponding share in Boeing's 480 deliveries last year was a mere 12.

Commenting on the results, Guillaume Faury, Airbus chief executive officer, said: "The significant order intake covering all our aircraft families including freighters, reflects the strength and competitiveness of our product line. We continue our ramp-up trajectory to deliver on our backlog."

But Boeing also finds plenty of reasons to stay positive, particularly in view of the expansion of international travels as COVID-19 controls are eased or lifted.

"We worked hard in 2022 to stabilize 737 production, resume 787 deliveries, launch the 777-8 Freighter and, most importantly, meet our customer commitments," said Boeing Commercial Airplanes president and CEO Stan Deal.

"As the airline industry expands its recovery, we are seeing strong demand across our product family, particularly the highly efficient 737 MAX and the 787 Dreamliner. We will stay focused on driving stability within our operations and the supply chain as we work to deliver for our customers in 2023 and beyond."

The two major planemakers have been engaged in a tug of war in recent years.

Airbus surpassed Boeing in sales in 2003, and had remained so for nine years consecutively until 2012, when Boeing led again with its newly launched 787 Dreamliner.

Airbus took the lead again in 2019, when Boeing took a heavy blow from 737 MAX accidents. Airbus' lead has been further consolidated by the nearly 300 new orders for airplanes from three major Chinese airlines last year. Last year the all-Boeing Xiamen Airlines ordered 40 A320 neo, worth US$4.85 billion, with deliveries expected from 2024 to 2027.

Statistics for November suggested that global aviation transportation had restored to 75 percent of the pre-pandemic level, and the figure is scheduled to climb with the easing of COVID-19 controls in China. This year, Airbus might sell more aircraft, but Boeing will maintain its edge in twin-aisle airplanes, and will continue to dominate in the freighter segment.

Meanwhile, according to Xinhua report on January 11, by the end of 2022, the Commercial Aircraft Corporation of China (COMAC) had received 1,035 orders for its C919, the home-grown large passenger aircraft, from 32 customers.

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