The 737 MAX and Covid-19 crisis hit Boeing enough that Airbus now appears in the lead both in short/medium haul and long haul aircraft sales. Airbus itself is far from unscathed by events. However, Boeing is expected to be facing a longer wait, before it can commence recovery in all of its activities.
At the start of the pandemic, some suggested that events gave Boeing some breathing space with regard to the MAX. In the greater picture, this isn’t much consolation for the manufacturer. Boeing’s problems with the MAX are well understood at this point. The company is eagerly waiting for the FAA and other authorities world-wide to release it for service.
The aircraft’s return may well happen before the end of 2020, but that won’t be the end of the story. The release will initially be only for those MAX models that had been in service before they had to be grounded. Models like the MAX-10, which were not certified at the time, will need more scrutiny before they can enter service. This is vitally important.
Boeing’s Biggest Small Plane
We already saw that Airbus is struggling to deliver its own A320 family of aircraft. Of course their undelivered fleet pales in size compared to the hundreds of grounded 737 MAX aircraft. Airbus’ A321neo model has a long-enough range (in the LR and XLR versions) to replace older aircraft in longer routes. Boeing’s MAX-10 can do the same – or better, claims Boeing. But there is a crucial difference: the A321neo is in service and in production today.
The MAX-10 may be more than a year away from release. Airliner lessors state that this gives a clear lead to Airbus in terms of demand. The prototype rolled out of the factory on November 2019, but so far has only done taxi trials. It should soon fly for the first time. However deliveries will likely only come after Boeing has satisfied EASA’s longer-term list of requested features, for the MAX family of jets. Existing MAX models will return to service before these additional changes are required – not the MAX-10.
In short, the single-aisle competition between the two manufacturers, relies heavily on the bigger versions of these aircraft. Airbus is squarely in the lead in terms of production. What holds them back right now is the inability of many carriers to take delivery of their aircraft. But as we saw, low-cost carriers are already picking up some of the slack. And they are already planning to accelerate this practice, as soon as the pandemic begins to ease.
And What Of The Heavies?
The picture on the twin-aisle side of the equation also presents Boeing with worries in the short and medium term. These involve both the 787 and the 777X.
The impressive new 777X flew for the first time a few months ago. Long term, there is nothing wrong with this aircraft, in commercial terms; the airlines like it, the market for it is out there – but not today. Right now, the aircraft has what looks a bit like a short-term A380 problem: with a 400 passenger capacity, it’s just too big for an airline to want to have in regular service.
Boeing’s 787 first flew in 2011, after three years of delays, but is now their most popular widebody, with a promising future. However Boeing recently had to slow down production and ask airlines to ground 8 aircraft due to manufacturing problems. The main issue, however, is again the size of the aircraft and the current inability of struggling airlines to put them into service. Boeing also has to contend the planned move of final assembly of the 787 to South Carolina. This is a cost-cutting and consolidation move (the largest 787-10 is already assembled there) but it comes with set up costs.
Nonetheless, Boeing still had an edge over Airbus in the widebody market before the pandemic. And obviously the airlines’ reluctance to put more 787s aircraft in service also applies to Airbus’ A350. But Airbus isn’t developing a new widebody against the 777X.
More Factors at Play
Of course there is more to all this, as far as the survival of the two aviation giants is concerned. Both of them have substantial defence divisions, with Boeing producing two fighter jet types for the US military (the F-15X and F/A-18E/F/G) as well as the KC-46A tanker (a modified B767) – which has had its own woes. There is also a substantial new jet trainer programme, an unmanned carrier-borne refuelling tanker for the US Navy and a number of 737NG-based military contracts.
This makes the company vital enough to the United States that the government is unlikely to let it fade into financial collapse. But what it can do to help, will depend on how fast the aviation recovery will be. The market IS there, for Boeing’s 777 and 787 aircraft, and the MAX-10 IS a very efficient competitor for the best Airbus has to offer – although the A321 appears to have further development potential. If the industry recovers to 2019 levels in two years or a bit more, support for Boeing in the US should be there, if it needs it.
A lot will depend on when a vaccine for Covid-19 becomes widely available around the world, and the re-certification of the MAX. Boeing and Airbus both have a lot at stake, but for now the European manufacturer appears to have the edge.