Admittedly, in the short term, Airbus cannot offer B737 MAX customers to replace them with Neo A320s. But the woes of the American plane place Airbus in an ideal strategic position to largely dominate the market for medium-haul aircraft, which represents more than 70% of aircraft sales.
Does Airbus really not profit from the setbacks of its rival Boeing, as its commercial director, Christian Scherer and certain observers assure? Not so sure … Certainly, as the European aircraft manufacturer explains, Airbus cannot offer to airlines penalized by the immobilization of the B737 MAX to replace them with aircraft of the A320 Neo family (A319, A320, A321) who box in the same category as the American plane (150-220 seats). The A320’s order book is so full that a company ordering today will have to wait until 2024 before receiving the first copies.
However, by leaving this short-term element, the setbacks of the 737 MAX do indeed benefit Airbus. They provide it with a predominant strategic position in the entire market segment ranging from medium-haul 150-seat aircraft to long-haul 240-250 seats, which represents more than 70% of aircraft sales. By pushing the analysis, Airbus can even be in a favorable position on the whole market ranging this time from planes of more than 100 to those of 300 seats!
The B737 MAX crisis weighed on the “NMA” project
First, the B737 MAX crisis completely weakened, not to say killed, the Boeing “new midsize aircraft” (NMA) project, an aircraft with a capacity of 220 to 260 seats depending on the version (two were planned), capable of covering distances of more than 5,000 nautical miles (9,200 km). Available by 2025-2026, this plane, which some had already called “797”; aimed to replace the old B757 and B767 launched in the 80s.
Before the immobilization of the B737 MAX in mid-March, following two accidents involving the anti-stall system (346 dead in total), the launch of the “NMA” program was to be announced in June, at the last Paris Air Show . With the immobilization of the 737 MAX, Boeing obviously focused on its flagship aircraft and the NMA was not launched. Worse for Boeing, Airbus formalized at the Paris Air Show the launch of the A321 XLR, a long-haul version of the A321. Scheduled for 2023, this single-aisle aircraft will be able to transport nearly 200 passengers on 10-hour flights. With the A321 LR, a version capable of providing flights of more than 8 hours already in service, Airbus has a very efficient doublet. Already wobbly before the immobilization of the MAX due to its arrival on the market considered late compared to that of the A321 LR (in service) and the A321 XLR, the NMA project is even more so today. For some observers, the project is even dead.
In any case, Airbus is now taking full advantage of this situation. Since its launch last June, the A321 XLR has increased order intake. They represent a good part of the 1,000 order intake recorded since January by Airbus. More than 400 copies have indeed ordered, in particular by American Airlines and United Airlines (50 copies each), two American companies which were studying the NMA of Boeing closely. Would they have ordered the Airbus if the “NMA” had been launched? We’ll never know.
In the meantime, the result is there: with the setbacks of the MAX and the uncertainty that reigns around the NMA project, Airbus reigns supreme on the entire market ranging from medium-haul aircraft from 150 seats to long-haul 220-260 seats. Thanks to the success of the A220, the new name of the Bombardier C-Series since the takeover of the program by Airbus 18 months ago, the domination of Airbus even begins with aircraft of more than one hundred seats.
Airbus master of the game on “single-aisle planes”
Above all, Airbus’ strategic location is all the more comfortable since the European aircraft manufacturer can afford to wait to see Boeing coming on the single-aisle market, that of the 737 and the A320. And this, whatever the scenario set up by his rival. If Boeing keeps its 737 MAX, a return to “normal”, if there is a return to normal, is not expected before two years from the return to service of the aircraft, for the time unknown. United Airlines has just postponed the possible commissioning of the aircraft to June.
However, during this time, Airbus will have put behind it the production concerns noted on the A321 and may consider further increasing its production rates (around sixty aircraft produced per month today) and selling out more quickly. its order book and by ricochet garnering new orders. Some customers are indeed reluctant to order planes that they will not receive for five or six years. While the A320 family already dominated the 737 MAX before the accidents of Lion Air and Ethiopian Airlines, Airbus should further increase its market share to reach “60% or more” by 2025, according to the former director. Sales representative, Eric Schulz, now consultant.
Will Boeing shut down the 737 MAX?
But it is on another scenario, that of the stopping of the 737 MAX program (which a certain number of bosses of the aeronautical sector envisage) that Airbus finds itself even more in a position of strength. If, for one reason or another (new problems with the aircraft after its return to service or boycott of passengers), Boeing decided to launch a new plane, Airbus would indeed have the luxury of being able to wait before reacting.
"On a strategic level, Airbus is well positioned. If Boeing launches a new aircraft to succeed the B737 MAX, Airbus can wait, see and respond or not," said Yan Derocles, analyst at Oddo BHF.
Because, in the absence of new engine technologies, the launch of a new American program in two or three years would lead to a device whose performance would be, certainly higher than that of the A320 Neo, but not sufficient to create a substantial deviation from the European aircraft. Especially since the A320 Neo still needs to be optimized, with for example the development of a new composite wing.
By launching such an aircraft which would not arrive on the market before 2027-2030, Boeing would therefore take the risk that Airbus, in accordance with its current route plan, would wait a few years to launch a new aircraft, which would bring for suddenly a real technological leap compared to current planes. The European aircraft manufacturer expects to launch the successor program to the A320Neo in the middle of the next decade, for entry into service in the early 2030s.
And there, difficult, not to say impossible this time, for Boeing to relaunch a new plane at 15 billion dollars a few years after having put the same amount to launch the successor of the B737 MAX, knowing that these two checks would be added to the bill for the 737 MAX, at least as high as the cost of an aircraft program. Admittedly, the weight of Boeing in defense and services is very important, not sure nevertheless that it is sufficient to finance all these expenses.
What will Airbus do?
In the event of a launch within two or three years of a launch by Boeing of a successor to the MAX, it remains to be seen whether Airbus will maintain its timetable for proposing a plane that will break in the 2030s. Or on the contrary, if he will mark Boeing in the pants by launching in stride the successor of the A320 Neo, for fear of seeing his American rival recover the hair of the beast commercially. This scheme would be detrimental to the entire sector. Because it would not push aircraft manufacturers to relaunch a new aircraft in the 2030s, a step deemed crucial to achieve the ambitious objectives of air transport to reduce CO2 emissions by 50% in 2050 compared to 2005.
The environmental issue will be decisive in the strategic choices. The rise in environmental awareness and the skyrocketing taxation on airlines can indeed push companies to wait for such an aircraft which would lower CO2 emissions and therefore push Airbus to wait. Especially since the A320 Neo can still be optimized.
Boeing also weakened on wide-body aircraft
The equation turns into a puzzle for Boeing. It is further complicated by the fact that the situation on the widebody market, dominated by the American group, is not clear either. If the B787 (300-350 seats depending on the version) continues to meet with great success, Boeing does not hesitate to cut prices to win campaigns and earn cash.
On the other hand, the market above the 787 (more than 350 seats) and that below (250-300 seats), raises questions. The first because the new B777 (the 777-9 and the 777-8) is late. The B777-9 (more than 400 seats) was initially to be put into service in 2020. Its little brother, the 777-8, was to follow it two years later, in 2022. However, the B777-9 already displays more a year late. For Boeing, this gap should not widen further, otherwise it will miss the juicy market for the renewal of the B777-300 ER (350 seats), which entered service in 2004, while Airbus has the A350- 1000 of a latest generation aircraft already in service for two years. The loss of the B777-8 to the A350-1000 in the Qantas tender for its ultra-long-haul flights is the first warning for Boeing. The Australian company wanted its planes for 2023 and Boeing obviously could not guarantee the availability of the 777-8 by this deadline.
In the extremely difficult market for 250 to 300 seat aircraft, Boeing is not at best either. After abandoning the B787-3 several years ago, the American aircraft manufacturer intended to target this market with the larger of the two versions of its NMA project. The absence of a proposal could also play the role of Airbus, while the A330-800 is struggling to sell.
However, according to some French manufacturers, Boeing could, if it launches a new plane to replace the MAX, design a device that also covers the NMA market. A device that would let its partner Embraer (which Boeing is about to buy) occupy the market for planes from 100 to 150 seats (or a little more) and launch an aircraft from 170 to 270 seats depending on the version. However, this plane would not solve the equation of the lack of technologies today necessary to design an aircraft allowing to jump a generation.