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Airline Mismanagement

By ignoring the most popular type of jet in the world, Airbus and Boeing have encouraged competitors to appear.

Both companies now find themselves forced to react and respond, rather than to lead the marketplace they formerly jointly and solely controlled.

 
 
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Airbus Fires the First Shot in the New A320/737 War with Boeing - part 2 of 4

Why Airbus and Boeing Don't Want To - But Must - Replace Their Aging A320 and 737 planes
 

A mockup of China's new C-919, a plane that will directly compete with both the A320 and 737 series.

Part 2 of a series on the needed evolution of the Airbus/Boeing A320/737 aircraft. Click the links at the bottom to read through the other three articles in the series.

 

 

Although arguably the most important planes in their complete ranges of planes. both Boeing and Airbus have been loathe to 'upset the apple cart' and to update or replace their best selling 737 and A320 series of planes.

But their inertia has encouraged new competitors to appear, and at least one of the competitors seems to pose a very credible threat to the Boeing/Airbus duopoly.

It is now well past time for Boeing and Airbus to urgently react and respond to these new competitive threats.

Why Boeing and Airbus Don't Want to Replace their 737/A320 Families

Developing a successor to the present planes would cost anywhere from perhaps $10 billion to $15 billion in development costs, and would require a massive engineering resource.

Neither company has either the spare cash or the spare engineering resource at present.  Boeing is scrambling to correct the terrible shambles of its 787 program (and struggling to pay for the appalling cost overruns too - see 'An Extraordinary Indictment of Boeing's Trouble-ridden 787' for more details).

Boeing also has problems with the far from optimum state of its 747-8 program as well - this latter program being not nearly as high profile, due to the near complete lack of interest by all airlines in the plane as a passenger jet.

Airbus, for its part, is finally starting to see the light at the end of the tunnel in terms of the problems it had with its A380 production, and now is scrambling as urgently quickly as it can to get its new A350 off the drawing board, onto the shop floor, and into the skies so as to catch-up to the major lead which Boeing sort of currently enjoys with its 787 (a lead which Boeing is frittering away with every new problem and every new delay in getting the 787 to market).  Airbus also has to pay for the development costs of the A350 as well.

Meantime, the two manufacturers have been in a type of Dutch standoff, where it could be thought the unwritten rules of the game were 'You don't replace your plane and I won't replace mine'.  With there being only two options for airlines to consider, if both Airbus and Boeing sat on their hands and did nothing, neither manufacturer would lose (although also neither would win).

But these days, corporate management seems more willing to embrace an objective of 'not losing' rather than seeking out an objective of 'winning'.  And so, years have passed with nothing substantial being done to update these two increasingly tired families of planes.

Time Favors the Slower Responder

Talking about winning and losing, the two companies are playing a game of chicken with each other - who will be the first to blink?  By delaying a decision as late as possible, each manufacturer stands to benefit from, as time passes, continued improvements in new manufacturing technologies (ie composite materials).

Amazingly, aircraft design and build processes are going through a new growth spurt of development. After decades with no real change at all to the increasingly tested and proven concept of manufacturing planes from riveted sheets of aluminum, Boeing and Airbus are now developing new manufacturing processes using new composite materials, and neither company has yet reached a new fully optimized understanding of how best to use composites in place of aluminum.

Each year sees an increased understanding of how to use composites in airplane construction, and currently Boeing and Airbus are using very different approaches to incorporating composites into their airframes.

It is easy for phone manufacturers, with a short development cycle, low development costs, and the potential to sell many millions of any given design of handset, to flood the market with model after model after model.  And for us as consumers, at most we are making a two year commitment to any given phone, so it is easy for us to buy a phone without locking us into a long term future with an increasingly obsolete phone.

But it takes five to ten years, and more than ten billion dollars to develop a new airplane, and airplanes have an economic life of twenty or more years.  Both the airlines and the airplane builders are playing for high stakes, and with a rapidly developing key new technology, no-one wants to invest in something less than a fully optimized implementation.

The Danger and Downside of a New Plane

At present Boeing and Airbus are more or less evenly matched as between the 737 and A320.  Both companies would prefer their plane to be a clear winner, but they're probably happy enough not to have a clear loser.

When the two companies develop successor planes, they have the duality of, on the one hand, possibly coming up with a better plane than the other company, but on the other hand, possibly coming up with a worse plane.

On the basis of 'better the devil you know than the devil you don't know' both companies are probably very happy just to leave well alone at present, rather than to risk a huge downside as part of striving for a huge upside.

Enter - Some Jokers in the Pack

Ooops.  The lazy cozy marketplace, with two manufacturers, each mainly motivated to preserve the status quo rather than to change it, is starting to break open.

Other airplane manufacturers are threatening to present credible competitors to the A320/737.

At present, Airbus' smallest plane is the A318, which seats 102 passengers in two classes or about 117 in one class, and Boeing's smallest plane is the 737-600, which seats about 110 in two classes or 132 in one class.  Neither company has bothered with smaller planes, leaving that to other companies such as Bombardier in Canada, Embraer in Brazil, and various other companies that have variously succeeded or failed to a greater or lesser extent.

But now Bombardier/Canadair is developing a plane (its CS300) that will seat about 119 passengers in a two class configuration or 130 passengers in a single class, and has taken 57 orders for the plane already, with first deliveries due in 2014.  Embraer already has a plane (its 195) that can seat up to 122 passengers.  Credible competitors are springing up at the bottom end of the Airbus/Boeing duopoly.

Competitors are also appearing that threaten to strike deep into the heart of the 727/A320 core market.

Russian competitors

In Russia, Irkut Corp is developing three models of a new plane, the MS-21, which will seat either 150/162, 181/198, or 212/230 passengers (in two class or one class configurations).  They claim to have already taken orders for 146 planes, and project the plane to start trials in 2014 and enter commercial service in 2016.

The plane is claimed to be 10% - 15% more efficient than comparable Airbus/Boeing A320/737 planes.

An already in production Tupolev plane has languished, gleaning few sales, but if the latest version, the Tu-204SM, proves successful, it too could become a competitor.  It carries either 142/164 or 175/210 passengers.

China

The Russian originating threats arguably pale compared to an emerging new competitor from the region that presents as the largest single market for new passenger plane sales - China.  The mainly government owned Commercial Aircraft Corporation of China, or as it is generally known, Comac, is developing two planes.

The smaller, the ARJ-21, holds 70/95 or 95/105 passengers, and so has been largely ignored by Airbus and Boeing.  The ARJ-21 is currently in trials, with six planes built.

The second plane is however a direct threat to the 737 and A320.  This is the C919, which is planned to be offered in up to six different models, carrying between 130 and 200 passengers, and with the first planes expected to take to the skies in 2014 and to enter commercial service in 2016.

Comac took its first orders for the C919, totaling 55 planes and options for another 45 at the Zhuhai Airshow in China in November 2010.

This is not a huge number of pre-orders, but it is early days for the plane yet, and it seems reasonable to predict that the largely Chinese government owned manufacturer will be at a competitive advantage when it comes to selling to largely Chinese government owned airlines in China.

You might laugh at the notion of China suddenly launching a successful airplane manufacturing enterprise.  But you'd be ill advised to do so.  Most of everything we surround ourselves with these days comes from China, and just recently, China has displayed its aerospace prowess by successfully cloning state of the art Russian Su-27 fighter jets (now known as China's J-11B).  It has convincingly shown that it can build excellent fighter planes.

China is currently being aided in its passenger plane development by western companies, so it is leveraging western expertise to shorten its development cycle.  The Chinese built C-919 plane has to be considered as a massive threat, particularly because the Chinese market is a huge one for both Boeing and Airbus.

So, while Airbus and Boeing have been carefully doing nothing, increasingly substantial competitive threats are materializing around them.  Like it or not, they are finding they have no choice but to do something.

This is part 2 of a series on the needed evolution of the Airbus/Boeing A320/737 aircraft.  Please see also the other parts of this series :

1.  The vital importance - and growing problems - of the A320 and 737 families of airplanes
2.  Why Airbus and Boeing don't want to - but must - update their aging airplane series
3.  Engine issues and what Airbus and Boeing could do
4.  Boeing's big problems

If you liked this, you might also enjoy our multi-part series 'Where is Boeing Going'.

 

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Originally published 24 Dec 2010, last update 02 Jul 2017

You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.

 
 
 
 

 


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