There is no rivalry as tough and complex as Boeing vs. Airbus rivalry.
Both firms have been around for decades, Boeing, the longer manufacturer, popularly known for its
iconic 747, the queen of the skies. Then Airbus, the more recent entrant, formed
by a conglomerate of European firms to build an aircraft to compete with American manufacturers.
In the narrow body marketplace, Boeing 737 vs. Airbus A320 series rivalry has been extremely
furious, Both the A320 series and the 737 series
have been improved over time to remain competitive. Looking at sales,
the Boeing 737 held the crown for the longest time as the best-selling commercial aircraft
and was only eclipsed by the Airbus A320 last year due to the worldwide groundings of the 737max.
In the wide-body market, we have the 787, the A330, the triple seven, the A350,
and the 747 vs the A380. Two-thirds of all airplanes
currently flying commercially are made by one of these two manufacturers. But there's
something that these manufacturers don't do: small planes, they don't make small planes.
This is a significant market that the giants of the aviation industry have not been
able to touch. If you board a plane in a small airport nowadays, there's a good chance that
it's either made by Embraer or Bombardier. The Brazilian manufacturer launched their ERJ
family just over 15 years ago. And to date, they have sold a thousand of them. It’s a
fantastic airplane in all ramifications and airports rely on them to stay in business.
Nearly 70 percent of the more than 100 daily flights that leave the small London City airport
is the Embraer ERJ, this is due to the noise restrictions and short runway.
Many airports can’t accommodate large airliners, so there's a serious place for small planes. And
Bombardier knows this, so in 2000, they launched the 86-seat CRJ900, the 100-seat CRJ1000 in 2007,
then in 2008, they launched the C Series program, which will seat up to 130 passengers,
featuring the next-generation technologies and cutting-edge fuel-efficiency. Its planned entry
into service was to be in 2013. This airplane will fit between the size of small regional jets
and the larger planes of Boeing and Airbus. The C-series was going to take advantage of
all the modern advancements in aircraft design, composite construction, advanced aerodynamics,
and high bypass engines to make one of the most efficient small airplanes on the market.
On September 16th, 2013, the C-series took flight for the first time. At this point, the company
was optimistic that the aircraft would enter into commercial service in 2014. But then, the problems
began. During flight tests, the aircraft suffered an uncontained engine failure. And that was a
big problem, not only did it strike a serious blow to the aircraft development timeline, but
it also prevented the manufacturer from showing off their new plane at the Farnborough Air Show,
which is the largest and most important trade show in the aviation industry,
where the company expected to secure crucial aircraft orders. So this was a devastating
setback, and the show only happens every two years. This raised questions about whether the
program could survive this blow. And it barely did. Bombardier changed the program's management
and slashed its workforce. flight testing was resumed on 7 September 2014,
after the engine problem had been isolated to a fault in the lubrication system. Unfortunately,
development delays and cost overruns hampered Bombardier’s ability to sell the aircraft.
In retrospect, some say that the aircraft was a great product that lacked sufficient
marketing to secure the sales needed. The program nearly ran out of money in 2015,
without the significant financial support of the governments of Canada and Quebec. The program and
company likely would not have survived, but they did. And on June 15th, 2016, the aircraft entered
service with Swiss Airlines on its first-ever commercial flight from Zurich to Paris.
By all accounts, the C series is a fantastic airplane for airlines. It's efficient and
versatile, while passengers praise its rare level of passenger comfort for a small plane.
It even has a range of up to 3800 miles, meaning it could fly transatlantic from New York into
small airports like London and Belfast City airports. As of October 2017, 14 C-series were
flying, but they needed to make 350 more of this aircraft to make the program profitable, and the
problem was that, they lacked the most important kind of orders: which are the American ones.
the American market will make or break the program and bombardier knew this. They were
desperate for an order from one of the main three U.S. airlines to prove its viability.
So, Delta Air Lines ordered 75 C series jets, it was initially a moment of relief and reward for
Bombardier, However, this one sale made Boeing furious, which filed a petition for dumping,
because bombardier allegedly sold 75 of them to Delta for only 20 million dollars each.
A quarter of the 80-million-dollar list price. This was an amazing price for Delta. But the
price was low enough even be illegal, and this practice is known as dumping.
To make a C series plane cost Bombardier about 30 million dollars, but they were
selling these planes at a loss because they wanted to gain prevalence in the U.S. market.
In any case, for what reason is an issue for Boeing? since they don't make comparable planes?
Boeing filed a dumping petition with the U.S. Department of Commerce,
because they believed that the dumping will curtail the sale of the 737 planes,
but Delta itself has said that they didn't want the 737 as Boeing couldn't offer them
a delivery slot before 2020, and besides, the 737 is fundamentally a different plane.
Even though the C-series has a better range, can take off from a shorter runway,
and is more efficient, In comparison, the largest C-series is smaller than the smallest 737MAX.
However, when you look at technological differences, the A220 outshines the 737MAX
in every aspect. Without going into all of the details, a basic comparison would find that
while the 737MAX has cable-driven flight controls,
the A220 is fly-by wire. The A220 is a smaller aircraft but offers greater passenger comfort
due to its 5 abreast seating. Some airlines choose the C-series over the 737 for its
superlative fuel efficiency and operating economics and emphasis on passenger comfort.
Boeing claims that Bombardier received subsidies that allowed for the below-market pricing. But
the money Bombardier received from the governments of Quebec and Canada came in either exchange for
ownership of the program or in the form of interest-free loans that will be paid back.
Boeing, on the other hand, has received over 14 billion dollars in subsidies in the last 20 years
through tax breaks from U.S. state and federal governments.
Nonetheless, Boeing asked the U.S. Department of Commerce to impose an
80 percent tariff on the plane to bring the price above the manufacturing cost.
On 26 September 2017, the U.S. Department of Commerce responded by placing a 300 percent
tariff on the plane, at this point, it seemed like the end of the line for the bombardier plane,
because with such a tariff, it could never be both competitive and profitable in the crucial U.S.
market. This, of course, would have ruined the crucial deal Bombardier had with Delta,
which was their opportunity to gain a stand in the lucrative US marketplace.
With few sales coming in and a lot of money being spent on this legal battle,
Bombardier, was on the verge of collapse, and this, is where Airbus stepped in.
Their vulnerable position led Airbus to throw the Canadian company a lifeline,
to take a controlling stake of the program in exchange for a boost of a more robust marketing
and manufacturing power. Bombardier gave in to the multi-billion-dollar deal in July 2018,
and the program was renamed Airbus A220. The reason this deal is so great for
Bombardier is that Airbus is a marketing and sales powerhouse. Their resources are far bigger than
those of Bombardier, and Airbus will definitely be able to sell more planes than Bombardier.
Another reason Bombardier agreed to partner with Airbus is because of this Airbus's final assembly
line in Mobile, Alabama. By assembling the C-series aircraft in the U.S, they'll
essentially be American planes, which means that they won't be subject to U.S. import tariffs.
On Airbus side, since this C-series doesn't compete in size with any of their planes,
Airbus gains a new modern airplane in their lineup that will allow
airlines to have truly all Airbus fleets Independent analysts have estimated that
over the next few years there will be demand for about 500 aircraft of the Cseries size
and low demand for 737s, and Boeing knows this. The C series, now Airbus A220 is expected to
capture up to 60 percent of that market, this is over 3000 planes. That's tens of
billions of dollars in additional revenue. Along the line, additional funds were needed
to ramp up production, funds that Bombardier didn’t have at its disposal. As a result,
they sold their remaining stake in the program to Airbus at the start of 2020. This takeover,
directly brought on by Boeing's actions, is the best thing that ever happened to airbus,
they now have a plane in a market segment that Boeing cannot compete with, without spending a
dime on research and development. The C-series will dominate this market segment, and every
cent Airbus makes is a great loss on Boeing's part. Just as Boeing expected, the C series will
hurt its business in the U.S, but now it will happen with a fully legal American-made plane.
In addition, Airbus is pitching the A220 to the lucrative Chinese market. So, If the A220 starts
crowding in on the 737s turf, then, it could mean more than the greatest blow Boeing has ever had:
This gave Airbus the greatest competitive advantage over its long-time rival,
and could potentially reshape the commercial aviation market.
What kind of plane do you think Boeing and Airbus should build next?
Let us know in the comment section.