Perhaps just as big as the Pepsi vs Coke rivalry is the battle between Airbus and Boeing. You might think that Boeing’s 737 MAX crisis has benefitted Airbus and its A320 program greatly. After all, the two aircraft types are direct competitors with one another. However, with such an enormous A320 backlog, Airbus isn’t benefitting from Boeing’s MAX troubles – at least not in the short-term.
At Airbus’ recent press conference discussing its performance and results for 2019, there were several questions about how the 737 MAX has affected Airbus. When one participant asked if the company was approaching Boeing customers, this is what their CEO had to say:
“Because of the situation of the backlog of the A320, it’s very difficult – if not impossible to propose slots in the timeframe that would fit to be able to compensate for the shortfall of the production of the other product.” – Guillaume Faury, CEO of AirbusAdvertisement
Indeed, with so many orders to fulfill, Airbus will still have a significant backlog even if Boeing resumes MAX production later this year. In fact, responding to another attendee’s inquiry, Faury said of the A320-family of jets: “We are sold out through 2025 roughly and therefore we cannot step in to offset the needs of airline customers that will not be fulfilled.”
Can the A220 benefit?
Perhaps it’s not an immediate beneficiary, but it’s possible that the A220 program could gain some attention from the MAX situation – at least Airbus’ CEO seems to think so. In fact, immediately after discussing the backlog of the A320-family program (and its inability to benefit from the MAX situation), he said the following about the A220:
“We have opportunities on the [A]220, obviously – but its a slightly lower segment. But we think the 220 can be a very appropriate solution for some of the needs in the market. We see the success of the product growing and we think the 220’s a very strong offer for many customers” – Guillaume Faury, CEO of AirbusAdvertisement
While its backlog is not as large as the A320-family of aircraft, the A220 still has about 550 unfulfilled orders as of the end of January. Airbus declined to disclose its production rate, citing confidentiality.
However, the company did disclose that there were only 48 A220s delivered in 2019. That being said, Airbus says it is working hard to ramp up production of the smaller aircraft as its Mobile, Alabama plant came online recently. It wants to be able to produce four per month by 2025 at this new plant. At its Canadian facility in Mirabel, Airbus is aiming for a 10 per month rate by 2025.
14 aircraft per month by 2025? Looking at the numbers, we’re skeptical that even the A220 would be able to benefit from the 737 MAX situation!
Airbus and its CEO have maintained an extremely diplomatic approach around its archrival’s unfortunate situation. “It has to do with safety, and safety is paramount for the industry. This is one of the things we all have in common,” said Faury. In fact, watching the recent press conference, it was clear Faury was trying hard not to mention the words “Boeing” or “737 MAX”. Instead, he chose to go with phrases like “our competitor” and “the other product”.
The MAX crisis has not only damaged the profitability of 737 MAX customers, but it also shed light on greater concerns with Boeing’s design processes and its closeness to the Federal Aviation Administration – the body responsible for certifying the aircraft. This damage to Boeing’s reputation is where Airbus may see a greater benefit – even if it’s something Airbus would rather not have.
With the MAX crisis, do you see any benefits to Airbus in the short term? Let us know if there’s something we’re missing by leaving a comment!