 "Boeing, Airbus, passenger, planes")
Illustration: Binay Sinha
Four years ago, Airbus scored a major victory: For the first time in its history, more of its passenger planes were flying around the world than those made by its rival, Boeing. Airbus has only tightened its grip on the market since.
Shifting the balance of power back in Boeing’s favor will be one of the most difficult challenges facing its new chief executive, Kelly Ortberg, who started last week. Pulling that off will require navigating the industrywide challenges hampering both firms while also landing a string of successes — starting with getting plane production back on track.
“Boeing is in a situation that is way more difficult than Airbus,” said Saïma Hussain, an analyst at AlphaValue, an equity research firm. “Airbus is gaining market share while Boeing needs to recover.”
The two companies form a duopoly in the global passenger plane market, but Airbus has far outproduced and outsold Boeing in recent years. Airbus has delivered over 3,800 planes to customers since the start of 2019, while Boeing has handed about 2,100, according to Cirium, an aviation data provider.
Of late, however, both companies are struggling to make planes fast enough for their customers, who are desperate for aircraft to serve rising global demand for travel.
“Is it frustrating? Of course. Would we love to get more aircraft more quickly? Of course,” Campbell Wilson, the chief executive of Air India, a Boeing and Airbus customer, said last month during a panel discussion at the Farnborough Air Show near London. But there is a silver lining, he added: “We’re all on the same boat. We’re all suffering.”
Unlike Airbus, however, Boeing has faced twin crises: a pair of fatal crashes in 2018 and 2019 that led to a nearly two-year global ban of its popular 737 Max plane, and a flight in January during which a panel blew off a Max jet at an altitude of about 16,000 feet.
Those events prompted intense scrutiny from regulators and forced Boeing to rethink its culture and practices. And while the January incident resulted in no major injuries, it led to a management shake-up that produced a new chief executive, Ortberg, the former head of Rockwell Collins, a major supplier to Boeing and Airbus.
Even with his background in the industry, Ortberg has his work cut out for him. Most immediately, he will have to oversee negotiations with the union representing production workers, with the aim of avoiding a strike when its contract expires in mid-September. He will also oversee efforts to stabilise production and address quality concerns. When asked to comment, a Boeing spokeswoman referred to a message Ortberg sent to company employees on his first day as chief executive.
“While we clearly have a lot of work to do in restoring trust, I’m confident that working together, we will return the company to be the industry leader we all expect,” he said then.
The contrast in the recent fortunes of Airbus and Boeing was on display at the Farnborough show, a biennial gathering that is a venue for deal-making in the aerospace industry. Airbus was celebrating having just secured certification from European aviation authorities of its A321XLR, a long-range variant of the A321neo, by far its most popular passenger plane. Boeing had been working on a similar plane, but the company shelved that project as it dealt with fallout from the Max crashes.
©2024 The New York Times News Service
First Published: Aug 16 2024 | 11:11 PM IST
