Old rivals
June 23, 2011
The Paris International Airshow was dominated this week by the Airbus A320neo, the upgraded, more fuel-efficient medium-haul workhorse which appeared to get the better of Boeing's venerable 737 series, the world's biggest-selling plane.
The medium-haul market is the most important segment of the aircraft industry, and Boeing estimates it will likely account for nearly half of all commercial airplane sales over the next 20 years.
But it is Airbus that is currently infringing on Boeing's home market.
The European planemaker celebrated the best week of sales in aviation history on Thursday, boasting of 730 orders for jets worth 50 billion euros ($ 72 billion) at the Paris International Airshow.
Airbus broke two records, booking its biggest-ever single aircraft order and racking up the highest number of orders for any manufacturer during any air show due to the popularity of its new A320neo fuel-efficient medium-haul jet.
Buyers included India's IndiGo airlines, Malaysia's AirAsia, Scandinavia's SAS Airlines, Taiwan's TransAsia and Saudi Arabian Airlines.
Airbus gets its nose ahead
Airbus's victory is all the more significant given that the medium-haul market was formerly dominated by the world's most ubiquitous airliner, the Boeing 737, now reaching a crossroads in its development.The US firm has yet to decide whether to give the old favourite new engines, as Airbus has done with the A320, or to develop an entirely new airframe, but has promised to make its mind up by the end of the year.
But while Airbus has started to win business from its main competitor, experts point out that the game for Boeing is far from over.
"It's important for the aircraft industry that there are at least two major manufacturers, so you have the choice," analyst Cord Schellenberg, of the Schellenberg and Kirchberg agency, told Deutsche Welle. "Big airlines like Lufthansa, Air France and British Airways all have both brands in their fleets. It's just that Airbus has its nose ahead at the moment. But when Boeing makes a move and brings out the new 737 then the orders will come."
New planes on the block
But apart from this heavyweight rivalry, other manufacturers also stepped into the breach in Paris. The Brazilian aerospace conglomerate Embraer, the world's fourth largest commercial airplane company in the world, took 39 orders for its E-jet series of regional aircraft, worth $1.7 billion.
Clearly proud of this haul, Embraer boss Paolo Cesar De Souza e Silva said that the company had now topped 1,000 orders, and 750 letters of intent to buy for the E-jet series.
"Embraer, like the Canadian Bombardier, is a well-established company that started out making 50 to 60-seat planes, and is now expanding into the market for 100+ seaters," said Schellenberg. "That makes them a direct competitor to Airbus and Boeing."
But Schellenberg believes the challenge for the upstarts is not so much making bigger and better planes than Boeing or Airbus, but getting the logistics right. "Spare parts is an area where the airlines always pay close attention," he says. "How reliable is the worldwide delivery of spare parts? Planes need spare parts all the time, and if they're not available immediately all over the world, then it can cost the airlines a lot of money."
Nevertheless, stock market analysts have begun to give the South American company very favorable reports in recent weeks. According to the financial website Stock World, Embraer has established itself as an "innovative player" in the market, and is imposing itself on its rivals.
In the larger picture, the aircraft industry itself is experiencing something of an upswing. But it is a very long-term omen, and one that is continually being tripped up by recent recessions.
Nevertheless, companies are predicting that they will sell around 10,000 new business jets in the current decade, worth $210 billion altogether. That compares very well with the 9,029 that were sold for $169.9 billion between 2001 and 2010.
Author: Ben Knight
Editor: Thomas Kohlmann