Oh, what a year 2018 has been for Airbus.
If we rewind back to 2017, Airbus was sure that 2018 would be THE year for their company. To not only fix all their problems but go from strength to strength…
But unfortunately, it seems that 2018 was a little rough and now the aviation company looks towards 2019 to be their year.
What happened in 2018 to Airbus?
2018 was a big year for Airbus. They set out to change their company (and through their aircraft, the world)
Let’s discuss some of the goals for Airbus in 2018 and what they managed to accomplish.
- They took control of the Bombardier C100/C300 program for a $1 to beat rival Boeing. Renamed to the new Airbus A220, this plane could greatly disrupt the industry and maybe even beat the famous Boeing 737.
- They rolled out the brand new Airbus A350 to airlines. It’s one thing to say you will bring a new product to market, but to actually do it is a great accomplishment.
- They also overhauled their executive office, to streamline management and to ensure that their company is more open to the public.
- Pratt & Whitney’s engine delivery delays are caught up and CFM’s delays are diminishing.
- Production of various aircraft are cranking up and 2019 will be the year that they are able to deliver more planes than ever before.
On the other hand, what are some of the challenges that faced them this year?
- The continued to have problems with the Airbus A320 production.
- Sales of the Airbus A330neo have been incredibly flat (despite it being a contender for the upcoming Boeing 797)
- The Airbus A380 sales continued to struggle, with a small Emirates order (which was delayed). Lufthansa was rumored to be ordering the aircraft, but this did not materialize.
- They were unable to negotiate new contracts for A400M this year.
Where does this leave Airbus?
Airbus is a funny company. If we look at Boeing, we can see that they are a highly profitable enterprise, with rich military contracts and plenty of sales of its aircraft across the world. In fact, Boeing just opened a customer fulfillment factory in China, the first western jet facility in the nation. On paper, Airbus looks very much the same, but the figures don’t quite add up.
- Boeing – $9 Billion in 2017
- Airbus – $5 Billion in 2017
Airbus currently boasts a production backlog of around 7,500 planes while Boeing’s backlog is around 5,900 aircraft. So why is Airbus making far less per plane than Boeing despite having more orders?
Part of this problem might be that Airbus is made up of a consortium of member countries. Unlike Boeing who can pick and choose their suppliers, Airbus must use a certain number from France, Germany, and other European nations. These companies know Airbus will be hard pressed to get another supplier and thus can charge a premium.
It was decided that France would build the cockpit, control systems, and the lower center section of the fuselage. While the Germans would be responsible for the forward, rear, and upper center sections of the fuselage. Britain’s Hawker Siddeley built the wings. The Dutch would make the control surfaces while Spain’s CASA, a late addition to the consortium in 1971, constructed the A300’s horizontal tailplane. – The consortium that built the first Airbus plane, the A300.
Airbus is in a great position to take massive control of the Airline market in mid 2019, if, and only if, they can respond to Boeing’s new 797 that will be revealed at the Paris Air Show later next year.
If they can reduce their costs and maintain their track record, we see no reason why Airbus couldn’t make 2019 their year.
Let us know in the comments what you think!