Airbus Vs Boeing: a historical duopoly
Written by Narjis Tazi
During the 15th century, Da Vinci imagined several “visionary” flying machines. Still, it wasn't until the early 20th century that the Wright brothers got the first motorized, controlled aeroplane off the ground, the Flyer I, in December 1903. Since then, aviation has gone from strength to strength, enabling more than 4.3 billion passengers to travel the world in 2023. Today, the aviation industry is at its peak. Therefore, it's relevant to look at the two leading manufacturers in the aviation market, Airbus and Boeing, who have formed one of the most emblematic duopolies of the modern age.
“Airbus is not just a commercial aircraft manufacturer”
Airbus: a European collaboration
The early 1970s saw the creation of Airbus, a symbol of Franco-German cooperation at first, then European collaboration with the arrival of Spain and the United Kingdom. The creation of Airbus was a response to the dominance of American aircraft manufacturers in the post-World War II aviation market. Despite a difficult start, the 1980s saw the beginning of a breakthrough for Airbus, with the introduction of the A310 and then the A320. In the 1990s, the launch of new long-haul aircraft enabled the Toulouse-based aerospace company to carve out a place for itself in the industry and win an ever-increasing share of the market.
Nowadays, Airbus is not just a commercial aircraft manufacturer but also has several subsidiaries, including Airbus Defence and Space and Airbus Helicopters. In 2023, the manufacturer employs over 140,000 people worldwide and reports a revenue of €65.4 billion, an 11% increase compared to 2022. The year is marked by the delivery of 735 commercial aircraft and 2,319 gross orders for commercial aircraft, a historic record for the company. Today, Airbus is a prime example of European cooperation, as illustrated by the creation of the A300-600ST, also known as the Beluga, a super transporter put into service in 1995 and used to transport heavy components between various production sites in Europe.
Boeing: a historic company
Founded in 1916 by W. Boeing, Boeing's history spans more than 100 years and extends far beyond the aerospace industry. Playing a key role in the wars of the 20th century, the company produced more than 16,000 bomber planes during the Second World War, giving it a new lease of life. In the second half of the 20th century, Boeing diversified and became the industry's leading aircraft manufacturer, introducing one of the first commercial jets in 1958, the Boeing 707. Sold in 1,010 units, it enabled the American manufacturer to almost eliminate all its competitors, driving out several major players.
“The launch of the 747 in the late 1960s marked the beginning of Boeing's domination of the market.”
In 2023, Boeing reported a total revenue of $77.79 billion, a 16.79% growth compared to the previous year, this was partly due to the delivery of 480 aircraft and the receipt of 1,456 gross orders. Operating in 150 countries, Boeing employs nearly 171,000 people worldwide. Moreover, the manufacturer is also a major player in space and defence and is involved in several space projects, notably as prime contractor for NASA's Artemis program, aiming to return astronauts to the Moon.
A profitable duopoly
In the commercial aircraft production market, Airbus and Boeing have been forming what is known as a duopoly for several decades. This is a form of oligopoly, meaning that a small number of companies share a market. In the case of a duopoly, this means that two companies completely or almost completely dominate a market. This implies that both companies possess considerable market power. According to the International Air Transport Association (IATA), Airbus and Boeing currently hold 99% of the market share. This situation of imperfect competition is mainly due to the existence of massive fixed costs. Indeed, aircraft development, manufacturing and certification costs are very high. Furthermore, the aircraft sector is highly regulated, preventing new competitors from entering the market. However, a new competitor seems to be appearing on the aviation scene: the manufacturer COMAC (Commercial Aircraft Corporation of China). In 2022, the Chinese company began delivering its C919, a medium-haul aircraft to Chinese airlines. China is also one of the world's largest aviation markets. In 2022, despite COVID-19 restrictions, the country recorded around 4.1 million domestic flights, and this figure is set to grow with the post-pandemic economic recovery. As yet, the C919 has not been certified by either the European Aviation Safety Agency (EASA) or the Federal Aviation Administration (FAA) in the US. Consequently, COMAC does not seem to be a competitor in the international market at present.
Today, the aircraft manufacturing market is still dominated by the two giants: Airbus and Boeing. As the figures show, Boeing has historically delivered more aircraft than Airbus, although the figures have remained relatively close. However, there was a marked drop in deliveries during the COVID-19 period. For Boeing, however, this decline began with the problems associated with the 737 MAX, which we'll discuss in the next section. These problems considerably widened the delivery gap between the two manufacturers. As a result, Boeing's market share plummeted after the incidents, reaching 22% compared with 77% for Airbus in 2020. However, the American manufacturer seems to have succeeded in reviving its business and is gradually regaining market share.
The end of Boeing?
Boeing has seen its sales drop sharply in recent years, mainly due to problems with the 737 MAX, an aircraft once heralded revolutionary but which turned out to be a disaster for the company. A member of the 737 family, launched in the 1960s, the 737 MAX represented all the company's innovations and responded to today's issues: low fuel consumption, transport reliability and the addition of new technologies that made flying easier.
On October 29, 2018, after only 13 minutes in the air, a Lion Air Boeing 737 MAX crashed into the Java Sea, killing 189 passengers. History repeats itself only a few months later, as an Ethiopian Airlines 737 MAX crashes under the same conditions.
“Two similar stories, two new aeroplanes and a scandal for Boeing led to the downfall of the American manufacturer”
And shed light on design problems, internal conflicts and, above all, influence over regulators. Since Boeing's merger with McDonnell Douglas in 1997, the company has become the sole producer of commercial aircraft in the US, and profits have become a priority. Boeing cut back on R&D investment and began to relocate production, causing numerous internal conflicts between engineers and management. All these factors led to an acceleration of the production process, as well as lies about the safety and training needs of the new models. This was at the expense of hundreds of people's lives and led to a loss of trust and credibility with both companies and public opinion.
Conclusion
Airbus and Boeing remain the two dominant players in the global aviation industry, forming a powerful duopoly that has shaped modern air travel for decades. Despite their respective struggles, Boeing with the 737 MAX issue more recently, and Airbus in their early years, both businesses continue to set the bar for innovation and output in the aircraft manufacturing industry. With Airbus representing a successful example of European collaboration and Boeing embodying over a century of American aviation expertise, their competition continues to drive technological advances and economic growth.
Nowadays, the 737 MAX is still one of Boeing's best-selling planes, and the company appears to be moving past its troubles in the present: in 2023, 396 aeroplanes were delivered. It remains to be seen if Airbus and Boeing will continue to hold a duopoly in the market as new companies like COMAC try to squeeze in. But for now, these two giant aerospace companies continue to lead the way in international aviation, influencing flight patterns and making it possible for millions of people to travel the globe in a safe and efficient way.
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