Airbus increases A350 aircraft production, takes advantage of Boeing's plight to secure a large order of 100 aircraft from Indian Airlines
Airbus and Boeing are at a crossroads: Airbus is meeting the strong demand for long-haul flights by increasing production, directly taking some market share from Boeing, while Boeing is busy dealing with regulatory pressure and improving manufacturing quality
Boeing's safety incidents continue to emerge, while Airbus has seized some of Boeing's customer orders, will the competition landscape of commercial aircraft be rewritten?
On April 26, Airbus announced that due to the surge in demand for long-haul travel and the severe trust crisis faced by its main competitor Boeing, the company plans to increase the production of A350 wide-body jetliners. Specifically, the company originally planned to produce 10 A350 aircraft per month by 2026, but now plans to reach 12 per month by 2028. It is reported that this model is a direct competitor to Boeing's 787 Dreamliner and the yet-to-be-certified Boeing 777-9.
Airbus's production increase plan has also affected its financial data, resulting in lower-than-expected profits. Airbus's Q1 quarterly report shows that the company's pre-tax profit for the quarter was 577 million euros (approximately 619 million U.S. dollars), lower than analysts' expectations of 814 million euros. Airbus's reason is that in order to increase production of the A350 model, the company needs to increase production inventory and recruit employees on a large scale, which has also led to an increase in operating costs and squeezed profits.
As Airbus's production increase plan is in full swing, Boeing's continuous crises stand in stark contrast. Following the catastrophic incident of the 737 Max 9 aircraft door detachment on January 5, Boeing has been continuously questioned. Its manufacturing quality has been widely criticized by regulatory agencies, legislators, and customers.
Some major customers have expressed disappointment in Boeing and issued ultimatums, stating that if Boeing continues to prioritize financial performance over safety and quality, they may consider purchasing alternative models from Boeing's main competitor, Airbus.
As a result, Airbus has seized some of Boeing's market share. According to media reports, Airbus took advantage of this opportunity to secure orders from some customers who were in urgent need of more aircraft. Earlier on Thursday, Indian airline IndiGo announced that it has officially ordered 30 Airbus A350-900 aircraft and retained the option to purchase up to 70 of this model.
In addition, Airbus CEO Guillaume Faury stated earlier this week that he has received orders from some airlines for Boeing aircraft, but due to Airbus's popular model A321neo being scheduled for production for the next decade, they are unable to meet this demand.
With the increase in market demand for long-haul travel and the market share contributed by Boeing's own mistakes, Airbus is racing against time to overcome supply chain constraints and increase the production of the A350-1000 wide-body jetliners to meet the growing market demand.
Despite the daunting task, Airbus remains determined to deliver 800 aircraft by 2024. In contrast, Boeing has been forced to slow down production due to regulatory demands to improve factory processes, resulting in a decline in the performance of its commercial aircraft division, lower-than-expected free cash flow, and a Moody's downgrade of Boeing's credit rating close to "junk" status In terms of stock prices, as of now this year, Airbus's stock price has risen by about 7.98%, while Boeing's stock price has fallen by 33.74%, hitting the lowest point in over a year.
