Very interesting. Thanks for this.
You know reading that article this is the exact same thing Revelation said regarding Airbus and their strategy on negotiations:
“Boeing’s financial terms and compensation due Southwest made it impossible for Airbus to match even if invited to bid. Furthermore, Airbus’ sales philosophy changed since the 2018 retirement of John Leahy as COO-Customers.
The aggressive Leahy was often willing to pursue creative deals to break Boeing’s incumbency. (Leahy’s willingness had limits, however. He never seriously pursued a deal with Ryanair, a rock-solid Boeing customer.)
But under his successor, Christian Scherer, Airbus is less willing to drop prices to rock-bottom levels to win a deal. Scherer is known to see the A320 and A220 families as more technologically advanced than the 737. He has noted these aircraft still have growth opportunities, while the 737 is maxed out. A stretched A220-500 and an “A322” or A321 Plus-Plus designs are on the shelf, waiting to go when the time is right. The A220-500 is a question of when, not if, a person close to the situation tells LNA.
Taking a page from decades-long messaging by Boeing, Scherer believes Airbus can command a premium over Boeing.“
Do you guys think Airbus can sustainably command a greater price over Boeing’s products?
Airbus has a huge narrow body backlog, more planes than it can build for years to come.
Their biggest problem is how to maximize their profits while building all those aircraft.
It does feel like they are taking their foot off the neck of Boeing, but it's not too hard to justify the choice to do so.
It is a change of the aggressive strategy of the Leahy eara, IMO.
The article also points out Airbus did not offer competitive pricing on A321neo to Alaska which ended up taking more 739s.
Seems Airbus is content with its order book and is not going to be very aggressive in terms of pricing and new product introduction.
Not as much fun as the Leahy era, but pretty easy to justify as long as they keep funding R&D so they are ready with a counter stroke if/when needed.
Airline customers are struggling and no one really knows what the post-covid world will look like so it's not a great time to spend money bringing a new product to market.
Seems to me that Airbus will also be as John Leahy says a paper airplane company for quite a while.
Also, having a viable competitor actually makes Airbus's life easier.
Think of how Microsoft kept investing in putting Office onto Mac, if they didn't have a viable competitor all kinds of anti-competitive accusations would have flown their way.
The next interesting competition will be IAG, IMO.
That might be a big enough concern in the halls of TLS to decide it's time to break open the war chest.