Frankfurt The first point of the new year went to Boeing. The American low-cost airline Allegiant Air ordered 50 short- and medium-haul 737 Max jets from the US group, and an option was signed for 50 more jets.
Airbus also had a good chance of winning, as Allegiant Air is already on the road with a fleet of the European manufacturer. But the deal shows: Boeing may have been in deep crisis for years because of quality problems, but Airbus cannot significantly outpace its US competitor in the global commercial aircraft business.
In 2021, the two rivals fought fierce competition. Airbus was able to win the title in the “Aircraft Delivered” discipline for the third year in a row. But the race is open for orders.
Airbus presented sales figures for 2021 on Monday evening. The European manufacturer delivered a total of 611 jets. Since Boeing – the US group will only be releasing its figures shortly – was only able to hand over 302 aircraft to customers by the end of November, Airbus is beyond the reach of the US group in this category.
Top jobs of the day
Find the best jobs now and
be notified by email.
It looks different in the order book. Adjusted for cancellations (net), Airbus recorded 507 orders in the full year 2021. Boeing was able to secure net orders for 400 aircraft between January and the end of November 2021. Since Boeing is expecting a few more orders in December – for example from the logistics group UPS – Airbus’ lead in terms of orders will melt.
“Despite all the euphoria about the good performance of Airbus, the current sales figures are rather sobering given that the competitor Boeing was almost completely on the ground,” analyzes Michael Santo, CEO of the aviation specialist consulting firm H&Z from Munich. The current “quasi-monopoly” has not grown disproportionately even considering the corona crisis.
Max crisis and Dreamliner problems slow Boeing
Boeing has had severe problems for several years. After two crashes with 346 victims, the 737 Max had to stay on the ground from March 2019 to December 2020. Control software that was programmed too aggressively was largely responsible for the terrible accidents and had to be improved.
In China, the aircraft was only released by the authorities a few weeks ago. The short- and medium-haul jet is the most important aircraft in Boeing’s range. It brings the group by far the largest number of orders. Now the US company has to ramp up the production rates of the popular short and medium-haul jets bit by bit.
At the same time, the 787 long-haul jet, also known as the Dreamliner, has been causing problems for a long time. There are quality defects in production, and Boeing repeatedly has to suspend the delivery of aircraft. In the third quarter of 2021, the US company wrote a net loss of $ 132 million because it had to write off $ 183 million on the Dreamliner production. After all: The loss was significantly lower than in the same quarter of the previous year, when the minus still added up to 466 million dollars.
In contrast, Airbus recorded a consolidated profit of 404 million euros in the third quarter of 2021. The European group has the more modern offer in the important market for short and medium-haul jets. With the modernization of the A320 family, which now bears the addition of Neo, Airbus had already many years ago more or less urged its rival to also overtake the much older 737.
Airbus has so many orders for the short- and medium-haul jet that customers find it difficult to order more jets, at least in the short term.
(Photo: picture alliance / dpa)
According to consultant Santo, there are several reasons why Airbus has so far hardly been able to benefit from the weakness of its arch rival despite these advantages. On the one hand, after the disaster with the 737 Max, the company maintained its own production figures and did not increase them. The reason: In the years before the pandemic began, Airbus struggled with delivery problems, for example with Neo’s engines. At that time, the company headquarters in Toulouse were happy to first come out of the valley of tears themselves, said Santo.
In other words: Airbus could only give very limited short-term delivery dates to airlines that were seriously considering switching from the Max to the A320 in the short and medium-haul segment. The European group was able to convince two loyal Boeing customers last year: the Australian Qantas and the French-Dutch Air France-KLM. Both have ordered A320 aircraft. But that was essentially it.
According to Scott Hamilton of the industry information service Leeham News, delivery problems on the part of Airbus were also a reason why the US low-cost airline Allegiant Air now opted for Boeing instead of Airbus. The airline has only been using Airbus aircraft since 2018. And taking a “sample” from another manufacturer into the fleet is considered inefficient in the industry. Because it increases the maintenance effort, and the flight personnel can no longer be deployed as flexibly as before.
Airbus is almost fully booked on the A320
However, Airbus was unable to promise suitable delivery dates for either the smaller A220 or the somewhat larger A320 family, according to Hamilton, quoting from a conversation with Allegiant CEO Maury Gallagher. Therefore, this then gave Boeing the contract. In addition, the US group is likely to have lured with appropriate discounts in order to get hold of the order in any case.
In the long-haul aircraft business, on the other hand, a development thwarted Airbus’ growth plans that began before the pandemic: wide-body aircraft are no longer in great demand. Many airlines no longer want to fly over large hubs on long-haul flights, but instead offer direct flights.
The specially redesigned A321 LR and A321 XLR with significantly larger ranges have become bestsellers. They are easy to fill and very efficient at smaller airports. The Lufthansa partner United Airlines, for example, is working on plans to use the XLR to travel to destinations in Europe such as Glasgow or Edinburgh.
However, the success of the upgraded medium-haul aircraft is undermining the wide-body business. This can also be seen in the orders for the A350, the long-haul aircraft from Airbus. Only Lufthansa ordered five A350-900s last May. At the same time, seven aircraft of this type were canceled by other customers. “Despite the weakness of the Boeing 787, the numbers on the Airbus 350 are rather mediocre, says consultant Santo.
At the beginning of December, workers at the Airbus subsidiary stopped working – in protest at the planned break-up of the company’s own supplier.
(Photo: Bloomberg)
It remains to be seen whether Airbus will be able to capitalize on its better position in the coming months. The European aircraft manufacturer faces two major challenges. Management wants to increase the monthly production rate for the A320 Family from 40 in the middle of the crisis to 64 by 2023 and maybe even to 75 later. In the highly fragmented supplier industry, however, there are already warnings of bottlenecks that could jeopardize this goal.
Added to this is the dispute, which has been simmering for months, about a new structure for partial production at Airbus in Germany, which operates under the name Premium Aerotec. The top of the group wants to hand over the production of individual parts to investors and to tie the construction of components closer to the parent company. IG Metall, who fears for thousands of jobs and doubts the strategic sense of the restructuring, is defending itself against this.
A few weeks ago, IG Metall therefore called for strikes that lasted several days, which hampered the production of the A320 aircraft. According to Daniel Friedrich, district manager of IG Metall coast and negotiator in the conflict, there are already problems in production: “The ramp-up in 2022 is at risk, the management does not have the processes under control,” warned Friedrich a few weeks ago. For Holger Junge, Chairman of the Airbus Group Works Council, one thing is certain: “You didn’t use the time during Corona. All suppliers are having a hard time raising demand again. “
More: Airbus’ risky growth plan – suppliers feel overwhelmed.