Boeing vs. Airbus: A Competitive Analysis of the Aerospace Industry

This report provides a comprehensive analysis of the competitive dynamics between Boeing and Airbus, two leading aerospace manufacturers. It explores their differing approaches to the marketplace, including market strategies, product design, pricing, and cost structures. The report examines the historical context of their competition, including the shift from Boeing's dominance to Airbus's emergence, and analyzes the factors driving their market share, such as technology, engine choices, currency fluctuations, and safety standards. A detailed comparison of specific aircraft models, like the Boeing 737 vs. Airbus A320 and Airbus A380 vs. Boeing 747, is provided. The study further investigates the outcomes of their competition, including the impact on the industry, supply chains, and the role of research and development. The report concludes with insights into the strategies employed by both companies to navigate the challenges and opportunities in the global aircraft market, highlighting the importance of innovation, cost management, and strategic partnerships. This report is contributed by a student and is available on Desklib, a platform providing AI-based study tools for students.

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COMPETITION BETWEEN BOEING & AIRBUS
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TABLE OF CONTENT
INTRODUCTION:..........................................................................................................................2
APPROACH TO MARKETPLACE:..............................................................................................2
COMPTETION:..............................................................................................................................3
BOEING VS AIRBUS:...................................................................................................................5
OUTCOME OF COMPETITION...................................................................................................6
CONCLUSION:..............................................................................................................................7
REFERENCE:.................................................................................................................................8

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INTRODUCTION:
Two of the world famous aerospace manufacturer in terms of huge market share is Boeing and
Airbus. While Boeing is based in United States of America, Airbus is an European Multinational
company focuses on building designing and selling civil and military aeronautical products
worldwide. Boeing is much older company having been founded in 1917 and has been operating
for almost 100 years. Airbus has come into operation from 1970 has posed a biggest challenge to
the existential dominance and market share of Boeing in the aircraft industry. Through large
operation of the subsidiaries and market strategies the airbus has been able to bag 50% of the
market orders of aircraft affecting the business of the Boeing (Vasigh & Fleming, 2016)..
The paper aims to make a report focusing on the issue and detect how the differing
approaches of these two big manufacturers led them toward success or posed in front of
challenges. How extent and outcome of competition in their market share and business operation
has driven them over years and in recent times have been well captured in this report. A
comparative study of the two firm has been done based on their operation, outlook , strategies
and approaches. The discussion is wrapped up with stating the outcome of the competition and
posing some viable recommendations for the challenges Being has been facing.
APPROACH TO MARKETPLACE:
The firm Boeing has been enjoying a larger market share for longer time indicating
almost 40 years of monopoly in the aircraft market prior to the advent of Airbus. Boeing 747 has
been one of the remarkable productions of the firm so far. On the face of growing market
demand in aviation industry even after few of the global economic crises, it is clear how the

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Industry is resilient and has immense potential to grow. With increase in income of the
population all over the world, the purchasing of airplane services has increased expanding the
possibility of market emergence. This has pushed the firm to adopt current market outlook that
focuses on long-term benefits of the firm calibrating the growing and emerging market
(Caliskan, 2010). The firm’s market approach has always been keeping in mind the general
outline of the economy and its performance. The indicators the firm focuses upon while
developing policies and strategies are in line of the gross domestic product of the country under
consideration, population and its proportion involved in partaking airlines services. Worldwide
commerce of the nation in form of international trade and transaction, emergence of technology
and composition of manufacturing also earn important role in the strategy planning of the firm.
Overall, the firm makes non-cyclical forecasts targeting long run growth in its contribution to the
aviation industry beyond the deadlocks of the short term.
The importance of the firm Airbus lies in the fact that it is the largest aerospace manufacturing
company in Europe with leading innovation in commercial aircrafts. The firm has experienced
commercial fails earlier which pushed t to come with some strategy that allows it to stand
different in the existing market place ruled by Boeing. The way the firm has approached toward
the market has been through the production and its quality. This led Airbus to go for extensive
product innovation and adopted the product differentiation strategy. The idea was, greater the
ranges of products meeting utilities and demand higher will be the satisfaction that would further
expand the business amid the bounded market so far. Application of these two strategies have
propelled the growth of the business firm undertakes leading to expansion of the operation in 170
places globally (Pitt & Norsworthy, 2012). Another driving approach of the firm has been
orientation towards family concepts of airplanes. The families of Airbus aircraft has allowed the

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firm incur lower cost of operation leading them toward success. The concept applied in avionics
has led the firm toward maintaining low cost in management and inventory as well. The success
of the airbus is evident in its partnership with larger countries and presence of MRO hubs in five
of the continents globally.
COMPTETION:
Due to the important contribution, they make in the aircraft industry, both Boeing and
Airbus faces toughest competition characterized in form of duopoly in the jet airline market from
1990 onwards. The series of global merging within aerospace industry allowed it to grow as two
of the big firms on the face of various faded and merged up bodies. The past 10 years data
reveals that the number of orders received by Airbus are 9, 985 compared to the Boeing
receiving 8, 978 orders (Naayagi, 2013). This clearly suggests that even if Airbus is leading in
the market now it is not much ahead of the Boeing who sighs just on its neck in terms of
production and sales. The rivalry of the companies are evident on many fronts and modes of
competition lies on various factors like technology, pricing, choice of engine, currency&
exchange rates and safety and quality of services provided by the firms.
Technology:
The competitions between the firms have been tough specially for Airbus who had to
come up with application of newer technology in order to compete with well-established ranges
of products from Boeing. A300 of Airbus applied composite materials and introduced automated
the functions of the flight engineers allowing the jets to have two-man flying crew (Caliskan,
2010). It is also the first company to come up with digital fly-by-wires controls in the airplanes.
Outsourcing:

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Airlines industries in the world are influenced and controlled wholly or partially by the
national governments. This indicates that decisions are taken keeping parity with the political
criteria and mindset (Pitt & Norsworthy, 2012). This has led the firms to go for subcontracting
the production and assembling of the components of aircraft in the manufacturing nations of
strategic importance. The basic intention is to derive competitive advantage.
Engine choices:
The competition and subsequent strength of the aircrafts coming from these two firms
gets determined by what kind of engines are being chosen by the firms. Airbus has made deal
with Rolls-Royce for using the engines manufactured by them whereas Boeing goes with engines
provided by General electric.
Prices:
Looking at the prices list of both the firm it is evident that Airbus is completely based
upon lower pricing with more allowances and discounts provided to the customers compared to
Boeing. This price competition is playing major role in driving the market share of airbus up
leaving Boeing much behind. Application of efficient technology and consequent lower cost are
the key to the secret behind lower price charged by Airbus.
Currency & Exchange Rate:
Airbus costs in euro while Boeing costs in dollar. Currency appreciation like dollars increases
the cost of Boeing production relatively making the airbus production more cost efficient and
attractive hence (Caliskan, 2010)
Safety & Quality:

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Both of the firms have been responsible in keeping up its brand value in terms of safety
and quality provided in the aircraft. The companies spare each others on this ground to make
comparison or compete rather follow well-engineered structure to deliver greatest quality.
BOEING VS AIRBUS:
What makes the competition interesting and intriguing are the strategies and executions of
the firms bases on factors like how the products are designed, pricing and cost, market structure
faced by them and strategies or approach they adopt, management decisions and marketing
policies. Even if both the firms contribute to the same line of production and service as two
biggest leading component in the aircraft industry, what drives them apart from each other in
terms of one firm gaining more market share are the managerial factors like production decision
on the face of demands and emerging market as the global trend reveals strictly (Naayagi, 2013).
Few of the important factors to motivate competition are:
 Design:
 Price and cost:
 Production and demand decision:
 Market structure:
 Advertising and other marketing strategies
 Management and profit
Airbus A320 Vs Boeing 737:

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Comparing the sales of these two leaders it has been found that Boeing 737 has outsold
Airbus A320 from its very introduction. The firm receives 7033 orders against its own record of
7940 with indication of slight fall in the orders. Airbus received orders of 4471 from the A320
launching in 2010. The recent data shows Airbus to sell approximately 1350 more than Boeing
737 has been sold in 2017 indicating growing market popularity of Airbus. In terms of delivery
also airbus lies ahead with 7610 deliveries since its inception in operation with 5501 deliveries in
2017 as compared to 9522 and 4430 of the Boeing family.
Airbus A380 Vs Boeing 747
The launching of Airbus A380 is of greater importance on the face of rising demand of larger
aircraft than Boeing 747 which ruled the market then. A380 came up as full length and double
deck aircraft taking the market share of the Boeing. This pushed Boeing to go for to develop a
third generation of 747-8, which caused greater competition directly between the firms in terms
of long routes.
OUTCOME OF COMPETITION:
While many of the market players is intimidated by existing competition between firms,
the outcome of competition can also bring out some positive factors for the quality of the product
or service in the industry as a whole. Both the firms being involved in complex manufacturing
processes are largely exposed to making higher capital investment (Baye & Prince, 2014). This
causes greater sunk costs in the production process. Moreover the complex production and
designing requires greater level of research and development expenditures. The competition on
the grounds of quality of services has pushed the firms go for best strategies as per the market
condition and changes taking place. As result of competition both the firms have been able to

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build a long supply chain all over the world along with their domestic markets of USA and
Europe. Airbus seems to follow system interaction as their mode of production inside USA. This
allows the firm to spread the risk of cost and sales are speared over range of foreign as well
domestic partners of the firm. Even if the final products are assemble inside USA or Europe, the
major airframe parts get produced and transferred through subcontracting made to foreign
suppliers.
The huge competition facing the firm posed Boeing toward much concern to come up
with some techniques that can outweigh the Airbus and regain its market share like before. The
firm pertains to different manufacturing process involving the economies of scale and economies
of scope. This allows the firm to go for larger production on the face of greater demand base that
allows the production cost to fall over time with having greater initial investment. Boeing is
more prone to produce commercial and military aircrafts that reach different markets.
Airbus focuses more on cost portion and tries to minimize cost by producing level of
outputs that optimizes the selection of production level at fixed or variable level. The firm
adjusts its long run average cost curve adjusting the fixed factors over period amid growing
competition and market emergence. More technological inclination is found to be adopted by the
firm in comparison with the Boeing that has allowed staying ahead in the market in terms of
charging lower price stemming from lower cost incurred (Naayagi, 2013). This creates huge
quality challenge for the entire aircraft industry worldwide while capturing the business share
with lower costs underlying the process.

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CONCLUSION:
From the discussion one important intuition can be drawn regarding the growing
competition between firms of US and Europe as biggest leaders in the aircraft industry that with
advent of technology and adoption of proper strategies to calibrate the market, a failure firm can
also come up to the top as leading seller and producer just by enhancing quality. No wonder why
the Airbus could leave Boeing behind even coming into operation after many years of Boeing.
Understanding the market need and channelizing resources in line of that Airbus put its head up
in global market evident in increasing number of orders and delivery comparatively

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Airbus. (2014, January 1). Airbus. Global Website -. Retrieved June 16, 2014, from
http://www.airbus-group.com/airbusgroup/int/en/our-company/What-we-do/airbus.html
Baye, M. R., & Prince, J. T. (2014). Fundamentals of Managerial Economics. Managerial
Economics and Business Strategy (). New York: McGraw-Hill/Irwin.
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http://www.academia.edu/1063739/An_Analysis_of_the_Airbus-
Boeing_Dispute_From_the_Perspective_of_the_WTO_Process
Current Market Outlook 2015-2034. (2015). www.boeing.com. Retrieved 9 November 2017,
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