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Good Or Bad Time For Airplane Manufacturers?

Sat Nov 26, 2005 9:38 am

30 years ago, there were many airplane manufacturers around, namely Lockheed, Boeing, McDD and Airbus, as well as the russian manufacturers in the east.

Today, we largely only have A and B in the main size airliner market.

Everyday we see the flame wars going on on between A and B, and this fight, of course, is also taking place as a PR war between Boeing and Airbus and the well known subsidy discussion.

This leads me to the question: Is this a bad or good time for Airbus and Boeing? 30years ago, there was much more competition, today it is only A and B, however, not matter which product Boeing has, Airbus can offer something and vice versa (I put the 747Adv and A380 in the same category, this can be discussed but is irrelevant now).

So, is the situation comfortable for both manufacturers, as there certainly is some common sense that both need reasonable pricing, or is it a buyers market?

I tend to believe that the manufacturers are under very high pressure today, otherwise huge investments into the 787, A350 and A380 wouldn't be understandable. But is competition stronger than 30years ago? And if so, why is that?
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RE: Good Or Bad Time For Airplane Manufacturers?

Sun Nov 27, 2005 4:40 pm

Quoting TheSonntag (Thread starter):
But is competition stronger than 30years ago?

I think in a way it is. What has happened is that as the number of manufacturers has reduced, the spread of their offerings has widened. What this means is that be it for a 150 seat aircraft, a 300 seat aircraft or a 450 seat aircraft, it is the same manufacturers going for the order. In the mid nineties, Boeing marketed themselves as offering the widest fleet range (the exact wording was something along the lines of "Airbus has distinct gaps in their range, while McDonnell Douglas only offers aircraft in limited market ranges"). This advantage has now been eroded. As you quite rightly point out, each manufacturer has an answer for their competitor's product.

In this age of fleet commonality, there is also the issue that an order can be all-or-nothing. Losing a contract for 20 narrowbodies could have an implication later down the line when the same airline comes to ordering larger aircraft (though as Air New Zealand with the A320 and 777, for example, has shown, this isn't a be all and end all situation). Plenty of medium sized operators have gone all-Boeing or all-Airbus. Although there are only two players in the game, there is now a lot more incentive to win.

Where I believe the pressure is going to come from will be the bottom end. Embraer is already biting on the heels of Airbus and Boeing with the 190 while rumours about Embraer building a jet in the 737 size range have been around for some time. Bombardier's C-Series, if it goes ahead, is another aircraft which would compete in this segment. The 737 and A320 families both likely to end their current production run in the next decade, and more than likely will be replaced with all-new offerings. The two regional manufacturers could be well placed to arrive on the market with an offering which is competitive, and which will not face competition from entrenched types. While the competiton with Airbus and Boeing will still be very tough, I would be very surprised if at least one of Bombardier or Embraer didn't come away with a fair slice of the pie. While i talked about commonality above, there are plenty of operators (especially the low-cost carriers like Southwest, Ryanair, Easyjet, Virgin Blue etc) who only operate one size of aircraft. Sharing the flight deck of the 787 or A380 would be of little marketing value to these airlines, and with the right offering, this is precisely where Bombardier and Embraer could make their mark.

"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
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RE: Good Or Bad Time For Airplane Manufacturers?

Tue Nov 29, 2005 10:19 am

There was an interesting article in The Australian newspaper last friday which touches on this issue in a way:,5744,17353292%255E23349,00.html

"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
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RE: Good Or Bad Time For Airplane Manufacturers?

Tue Nov 29, 2005 10:26 am

I think it's healthy competition. We have two very competant companies with great products driving better aircraft and better technology.
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RE: Good Or Bad Time For Airplane Manufacturers?

Tue Nov 29, 2005 11:30 am

Just remember, There is a nice little sleeping giant in Brazil. If the Boeing rumors are true and they might make a 75 pax model of the next-gen 737, it will be the equivalent of Pearl Harbor and awaking the "sleeping giant" of the US. I give E max. 20 years before they build at least a 757 size aircraft.  stirthepot 
Well I believe it all is coming to an end. Oh well, I guess we are gonna pretend.

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