But Airbus too has been afflicted by production problems that have caused it to miss delivery targets and burn cash. Airbus has been trying to match its research and development expenditure with that of Boeing, despite its relatively lower business scale. Most of the commercial aircraft models being manufactured by the two companies are close competitors, the most popular ones being the Boeing 737 family and the Airbus A320 family of aircraft. Airbus' order book is also less exposed to financial buyers like airline leasing specialists and should hold up better through the downturn. The roots of Airbus, in fact, lie in state interests and the company continues to be backed by EU nations, with the governments of Germany, France, and Spain currently holding 11.04%, 11.06%, and 4.16% stakes, respectively. Cumulative Growth of a $10,000 Investment in Stock Advisor, Better Buy: Boeing vs. Airbus @themotleyfool #stocks $BA $EADSY, embarrassing details about Boeing's culture, design and build an autonomous submarine for the Navy, Dow Jones Slumps 100 Points; Boeing Stock Lower After Fatal Crash; Cisco Fights to Close Acacia Merger, Boeing 737 Crashes Shortly After Takeoff in Indonesia, Boeing Agrees to $244 Million Penalty for 737 MAX Flaws, Airbus Sees Deliveries Plunge 34% as COVID-19 Takes Toll on Airlines, Boeing to Pay $2.5 Billion to Settle 737 MAX Criminal Probe, Copyright, Trademark and Patent Information. In the early 1990’s The Boeing Company and rival Airbus (two of the World’s biggest competitors in the commercial aviation industry) were each interested in developing a “superjumbo” class of commercial airliners. One of the most notable rivalries in the skies: Boeing vs Airbus. Boeing can use its defense business, which accounted for about one-third of 2019 revenue, to help cushion the blow of a commercial slowdown. On the other hand, Boeing (due to the 737 MAX fiasco) has limited leverage with its customers who want to defer deliveries or negotiate new terms. We use cookies to ensure that we give you the best experience on our website. The COVID-19 pandemic, and the travel slump that has followed, is threatening to upend that success. The company, once known as European Aeronautic Defence and Space, has in recent years asserted its independence after years of criticism that it acted at the whim of European governments. Airbus’ revenues are better diversified and are from markets that have high growth potential such as the Asia Pacific, especially China. Boeing also has a competitive edge in the ballistic missiles space since MBDA doesn’t produce them. Boeing is the older of the two. Investors have taken notice, with shares of both Boeing and Airbus down more than 50% year to date. While Boeing has no offerings in the civilian helicopter segment, it’s a market leader in the military attack and transport helicopter segments. Defence and Security businesses, where Airbus has been weaker, can partially offset the effect for Boeing, whereas Airbus will have no similar offset. Airbus has been struggling to grow its revenues in the last five years, having registered a CAGR of 0.97% since 2014 compared to its rival Boeing, whose revenues grew almost three times faster, at 2.74%, over the same period. Boeing offers unique and advanced military rotorcraft products such as the AH-64 Apache, CH-47F, V-22 Osprey, and AH-6. To be honest, I have no desire to invest my money in either of these stocks right now. For those interested in adding aerospace exposure, there are a lot of defense pure plays that look like much better values today. Boeing was a mess even before the pandemic, troubled by issues with its 737 MAX and other signature programs. Boeing is massive, during classic “Airbus vs Boeing” debates, you can’t deny the fact that Boeing is massive in comparison to Airbus. Boeing has targeted mid-year 2020 to return the MAX to service, but it is debatable whether customers will care. Its A320 was a beneficiary of the 737 MAX's woes, although Airbus' wait list for the A320 was so long already that airlines found it hard to switch on the fly. The company reported the cancellation of 150 orders for the 737 MAX in March, and ended the first quarter with net cancellations across the portfolio of 119 planes. Follow the company to be always up to date with this company. Boeing Vs. Airbus Stock. The US Government filed a case with the World Trade Organization (WTO) in 2006, against the EU subsidies worth $22bn to Airbus for new product development. The new book, "Boeing Versus Airbus," describes an equally primal contest for survival, and the diametrically opposite strategies pursued by Boeing and Airbus. While the Airbus China Innovation Centre focuses largely on the company’s global factories, Boeing’s Chinese innovation centre is focused on innovating and improving exclusive access for the Asia Pacific market. Boeing 747-8 and Airbus A380 are the largest two aircraft produced by both manufacturers, this means not all airlines will find a home for these in their fleets. They have a long history that has actually served as a … They'll just have to sit out a prolonged slump, and perhaps a broader market recovery, to realize those gains. Airbus, like Boeing, has in recent years leaned heavily on its swelling commercial order book. Airbus vs. Boeing: Some background Before we get into preferences, let’s talk a little about the differences between the companies. Its enormous engines and unprecedented wingspan promise to bring unbeatable fuel efficiency, and to usher in a new era of high capacity, long-range flying. But investors should be aware that the German, French, and Spanish governments still control about 25%, combined, of the company's stock. Better Buy: Boeing vs. Airbus Lee Samaha 9/13/2020. Further, the success or otherwise in highly scalable new businesses such as urban air commutation and local air cargo deliveries could flip their position either way. See what iPhone 12 Pro's new lidar feature can do … Unfortunately, the book is neither as well-written nor as well-edited as the first book, repetitive and … Airlines that three months ago couldn't get their hands on new planes fast enough are suddenly grounding aircraft and taking an ax to their growth plans. For Airbus, the looming threat is the $11bn annual countermeasures proposed by the US for alleged unfair trading, which, if imposed, would cause severe financial pressure and greatly reduce its competitive position. Boeing (NYSE:BA) and Airbus (OTC:EADSY) have been waging a global battle for commercial air superiority for decades, and shareholders of both companies have benefited. Airbus’ product portfolio is differentiated by civilian helicopters that include models ranging from light single-engine to twin-turbine heavy-lift rotorcraft, where Boeing has no presence. More than half were 787s. According to Airfleets.net, Airbus has suffered 86 total crashes or accidents between its models – fewer than just the 147 suffered by Boeing’s 737 alone. The US has retaliated by requesting the WTO to impose approximately $11bn in annual countermeasures to offset the damaging trade effects of the subsidies enjoyed by Airbus. The immediate future for Boeing and Airbus looks equally uncertain as both have their own set of challenges to overcome. Weiss Technik UK is a market leader and one of... Weiss Technik UK is a market leader and one of the most innovative manufacturers of environmental simulation systems. Airbus too has a defense business, with defense, space, and helicopters accounting for about 26% of total revenue. Its space business and helicopters are the crown jewels of its non-passenger aircraft portfolio and are steady revenue generators. “Boeing has better diversified segments as well as earns higher margins than Airbus.”. For Boeing, the immediate threat is further crashes or failures of the 737 Max, which can result in order cancellations and litigations that could affect revenue and market share in a crucial business segment. Boeing delivered … 60. A 16-YEAR FIGHT at the World Trade Organisation (WTO) between Boeing, an American planemaker, and Airbus, a European one, over illegal subsidies resembles a heavyweight boxing bout in … “Boeing continues to face order cancellations for its 737 Max family, whose order book at the time of grounding was worth $600bn.”. The “superjumbo” is an entirely new class of … But all those awards are early stage and will not offset the near-term revenue losses caused by a commercial slump. At first glance, the design of the flight decks for Airbus and Boeing aircraft which are currently in production are visually quite similar. Airbus and Boeing each own roughly half of the global large commercial airliner market. The 737 MAX at launch was expected to be one of the top-selling aircraft of all time, but it was grounded in March 2019 after a pair of fatal crashes. Airbus has, however, slowly eaten into Boeing’s pie of the large commercial aircraft market by scaling-up quickly in a booming aviation market. Airbus received its first order for the A300B from Air France in 1970. “Although Airbus didn’t become a significant competitor until the 1990s, it has slowly eaten into Boeing’s pie of the large commercial aircraft market.”. Both the companies are eying the potential mass markets in different applications. The company has struggled to return it to service. Boeing has had to deal with two major groundings. The defense business has largely been brushed out of the spotlight in recent years, in part because one of its flagship programs, the KC-46 tanker, has suffered delays and cost overruns that led to a rare public rebuke from Pentagon officials. “Boeing has a clear competitive edge in military products, over Airbus.”. Although Airbus’ deck in this space is not empty, six of the eight military rotorcraft it offers are based on civilian helicopter platforms. Boeing had already planned to decrease production rates for its larger 787 Dreamliner in 2021, and its 777X has been plagued by development delays and risks entering service as demand for large planes is waning. Similarly, Airbus … Some of the fault lies with suppliers, including Raytheon Technologies' Pratt & Whitney engines, but delays were also due to internal design changes and backed-up assembly lines. The History of the Airbus vs. Boeing Rivalry Garrett Parker 2 years ago There is no secret to the fact that Airbus and Boeing have long been rivals, offering one another stiff competition in the airplane manufacturing business. The screens, thrust levers, and various controls and levers are located in similar positions as can be seen when comparing an Airbus 320-200 and Boeing 737-800 flight deck in images below. There are some bright spots in defense. Even if you have a preference, true aircraft aficionados should know all of these airliners like the back of their hand! Both the companies have sensed the potential threat of competition emerging from countries like China and have established innovation centres in China. He spends a lot of time these days focused on the industrials and financials. The below table compares the product portfolio of the two companies: Airbus loses out to Boeing in the missiles systems category, where it has no direct offerings, although it holds a 37.5% stake in European missiles developer and manufacturer MBDA. Families on the brink fear what's next as pandemic benefits expire. Boeing is the more dynamic company, with better franchises on the defense side. The Boeing 767 (top) and Airbus A330 (bottom) are twin-engine, wide-body airliners. Boeing sold its 8,000th 737 aircraft in 2014, 46 years after its launch – a feat that Airbus achieved in just 30 years. John Cox: I am asked this question frequently, it is very hard to answer.I flew the Boeing 737 for 15 years and the Airbus A320 for six years and thoroughly enjoyed both of them. The American planemaker and its European rival share the market for large airliners almost 50/50, based on deliveries in 2018, and fight tooth and nail to beat one another. Depending on what view you have of the aircraft. Investors who put money into Boeing today and are patient through an extended cycle will probably come out significantly ahead. The company arguably has the more complete lineup of commercial aircraft, thanks in part to its 2017 acquisition of a controlling stake in Bombardier's CSeries jet family. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Its A320 was a beneficiary of the 737 MAX's woes, although Airbus… Airbus is more dependent on civilian aircraft for its revenues, with its commercial and helicopters (majorly civilian) segments together contributing a majority share of more than 80% of its revenues, whereas Boeing earns just 60% from the commercial aircraft category. The spat is in focus with the WTO allowing the EU to impose tariffs on billions of dollars worth of US goods. Airbus also delivered 196 planes. Market data powered by FactSet and Web Financial Group. Fuel efficiency & Range Firstly the Boeing 747-8, Boeing states the 747-8 is more cost effective per seat per mile than any other aircraft in its class based on the following factors. Boeing was founded by William Boeing in the early 1900s, while Airbus was founded in the 1970s. Elsewhere in the portfolio there are issues as well. When not arguing on Twitter or writing about the markets, Lou spends his free time out in nature, complaining online about the Baltimore Orioles or Watford FC, or listening to early 1990s alt rock. Both aircraft lines have become flagships of each respective firm, and the winner in the future will determine who builds the most premium aircraft. Of the two, it's hard to say which stock will perform better over the next year or two. “Airbus spends as much as Boeing in R&D, despite its smaller scale of operations compared to the latter.”. The main landing gear on the Boeing 767 lean to the front, while those on the A330 lean to the rear. Boeing’s plants are bigger, their aircraft are bigger, their offices are bigger, even their market cap is bigger! Boeing, on the other hand, aims to capture the on-demand air deliveries market and has already developed a demonstrator cargo air vehicle named HorizonX. In the last 18 months, Boeing has scored a series of wins, including a $9.2 billion contract to build the Air Force's trainer jet, a $2 billion-plus deal to replace the UH-1N Huey helicopters, an $805 million contract to design and build a new Navy refueling drone, and a contract to design and build an autonomous submarine for the Navy. Europe to Airbus is what the US is to Boeing. The EU filed another case in 2012, alleging that the US failed to abide by the findings against it. Both management teams are going to be talking up their defense businesses in the quarters to come, but both companies rise and fall with the commercial aerospace cycle. Even after the pandemic is behind us, it's likely to leave a recession in its wake, and airlines seem certain to be more focused on survival than on expansion. Both have smaller and underappreciated defense businesses to fall back on, but commercial has dominated the headlines, and the income statement, for years. Photo: Airbus/Boeing/Simple Flying Contents Introducing the two contenders. Boeing was the … Airbus is targeting the urban commutation business with its online helicopter booking platform Voom that connects travellers with air taxi companies, laying the foundation for urban air mobility powered by e-VTOL vehicles. Airbus planes have suffered no major grounding issues apart from a temporary grounding of 14 Airbus A320 Neo aircraft in India due to P&W engine woes in 2018. The grounding, however, didn’t cause a significant impact on the 787 orders and deliveries as the US Federal Aviation Administration (FAA) allowed US carriers to operate Dreamliners after making the required changes to battery systems in April 2013. And Boeing's balance sheet is badly bruised after the company spent most of 2019 supporting its supply chain as the 737 MAX drama played out. In October, Airbus received 11 gross orders vs. 0 for Boeing bringing the combined total to 11 compared to 425 orders in the same month last year where it should be noted that Airbus … Lou has followed the markets for more than two decades, developing extensive contacts including industry leaders, consultants, regulators, and labor representatives. It also led to the firing of CEO Dennis Muilenburg in December, but his replacement, David Calhoun, helped oversee the company as a Boeing board member since 2009. Airbus, like Boeing, has in recent years leaned heavily on its swelling commercial order book. Sign up here for GlobalData's free bi-weekly Covid-19 report on the latest information your industry needs to know. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); A compliance panel set up by the WTO to assess the appeal rejected 28 of the 29 claims made by the EU, in June 2017. During four of the last five years, Airbus has spent more dollars on research and development compared to Boeing. Boeing also has a competitive edge in the ballistic missiles space since MBDA doesn’t produce them. China contributes more revenue than the rest of the Asia Pacific for Boeing. This partly explains why Boeing is better placed to absorb any potential financial shocks of multiple grounding incidents that may affect sales. The launch of 747 long-range airliner with much larger seating capacity than other commercial aircraft in 1970 further strengthened Boeing’s position in commercial aviation. Boeing, thus, has a clear competitive edge in military products over Airbus, which misses out fully on missiles and partly on helicopters and fighter jet varieties. The company is an amalgamation of European aerospace companies pushed together in the 1970s to better compete against U.S. giants. CCP Gransden is a leading specialist in advanced composites design... CCP Gransden is a leading specialist in advanced composites design and manufacturing. Returns as of 01/11/2021. The company went on to develop several small passenger and military aircraft in the two decades that followed,  becoming a frontrunner in all-metal aircraft construction. The Boeing 777 vs. Airbus A350 is a different battle. For example, Boeing generated $13.6 billion in FCF in 2018 (the year before the 737 MAX was grounded), representing over 15% of its current market cap. Which company is better prepared to weather the storm and reward shareholders? Hover over the logos to learn more about the companies who made this project possible. The Boeing 777X is the world’s largest twin jet ever built. If both emerge from scandals safely, Airbus would continue to compete with Boeing’s commercial aircraft as well as Space businesses. If you continue using our website, we'll assume that you are happy to receive all cookies on this website. Boeing has delivered more than 10,000 of its bestselling 737 family since its launch in 1968, while the Airbus A320, which hit the market two decades later in 1988, saw more than 8,000 units sold by 2018. “Airbus loses out to Boeing in the missiles systems category.”. Rival Airbus had a modest beginning with the launch of the A300B, which is based on the A300 wide-body jetliner. The Micro Systems Technologies (MST) Group provides advanced solutions for microelectronics manufacturing, including high-performance / high-reliability printed circuit boards (PCBs), liquid crystal polymers (LCP) and ceramic substrates, as well as advanced assembly technologies. Boeing’s revenues are concentrated in North America, whereas Airbus is benefitted by European state support. The only fighter jet Airbus offers is the Eurofighter Typhoon, which has no variants to suit customer-specific mission requirements. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); While the quick growth of Airbus can be attributed partly to the boom in commercial aviation, the feat wouldn’t have been possible without state benefits, which the US claims are unfair. Aerospace Technology compares the two aerospace behemoths and tries to envisage what the future holds for them. Airbus historically has been a bit of an enigma to U.S. investors. Boeing 767 vs Airbus A330 Two popular wide-body jetliners are similar in overall appearance. Stock Advisor launched in February of 2002. It too has had less success with larger, wide-body aircraft, developing the massive, but ultimately commercially unsuccessful, A380 double-decker behemoth. Airbus also has just a single product in the fighter aircraft segment unlike Boeing, which has advanced fighter jets such as F-15 Strike Eagle and F/A-18 Hornet that are offered in multiple variants. The company earns more revenue from Asia Pacific (36.6%) than Europe (27.9%) and the two regions together contribute approximately 65% to its gross revenue. Here's a look at the two aerospace giants to determine which, if either, is the better buy today. Boeing strikes me as the higher-risk, but potentially higher-reward, stock over the coming years. 787 Dreamliner vs A380: cockpit comparisons. Earlier in January 2013, the Boeing 787 Dreamliner fleet was also grounded due to issues in onboard lithium-ion batteries. How Boeing vs. Airbus Became Trump vs. Europe President Trump and Boeing’s chief executive, Dennis A. Muilenburg, discussed a long-running … Its entire global fleet of 737 Max aircraft was grounded in March 2019, following two fatal aircraft crashes. 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Airbus also dominates the civilian helicopter segment with a market share of 54%. Boeing introduced its first commercial jetliner, the 707, in 1958. We use them to give you the best experience. It also will likely have more freedom to right-size its business as necessary compared to its European rival. Although Boeing too earns a similar chunk of its revenues (70%) from just two geographic areas namely the US (44.2%) and the Asia Pacific (25.6%), its revenues are more concentrated in the US, unlike Airbus, which has a better diversification. European revenue contribution for Airbus (27.9%) is more than double compared to Boeing (12.8%). The WTO’s verdict in 2010 confirmed that Airbus received $18bn of illegal subsidies, including $15bn of launch aid from the three governments that have interests in Airbus. The A350 vs. the 777X, which is best? In the sense that Boeing is much sleeker in form while the Airbus is more rounded. Boeing’s growth was also not at the cost of margins, as witnessed by its 50% higher operating margins (11.85% in 2018) compared to Airbus (7.92%). The commercial aircraft market, which is a major revenue driver for aerospace companies, is fully dominated by Boeing and Airbus, which together hold 99% market share. Incidents such as grounding due to serious technical issues could mar the reputation and sales of commercial aircraft manufacturers. Boeing vs Airbus Safety Records What about Boeing and Airbus’ safety record? The rivalry between Boeing and Airbus has certainly been interesting. Boeing 737 & Airbus A320. Airbus also earns higher revenue from the Asia Pacific, which Boeing too recognises to be a crucial market for its future growth. Aircraft, developed by other companies, but sold by Boeing or Airbus (such as the Boeing 717 and the Airbus A220) are excluded, as are modifications of particular base model (such as the Boeing 737 MAX 9 or the Airbus A321 – derivatives of the 737 MAX 8 and the A320 respectively). Boeing has sounded the alarm, suspending its dividend, temporarily halting aircraft manufacturing, and lobbying for government assistance CEO Calhoun claims the company doesn't really need. The company had an order book of 4,636 units worth $600bn of the 737 Max family at the time of the grounding and continues to face order cancellations from several airlines. But unlike Boeing, Airbus Defence doesn't have a lot of potentially needle-moving innovative programs on the horizon. Airbus has so far impressed airlines with its A350 series, but that may change with the 777X on the horizon. Competition has, eventually, resulted in legal fights by the governments to safeguard their respective business interests. In March 2011, the WTO ruled out a major part of the allegation stating that 80% of the subsidies were found to be fair. That's going to be a blow for Boeing and Airbus. This might be because Boeing receives millions in government contracts (see below) as well as having cheaper aircraft to build. It's been a boon to airlines, who have benefited from every more efficient airplanes at competitive prices even though a classic duopoly like this usually results in less favorable outcomes for buyers. Boeing forayed into commercial aviation by launching its first aircraft, the B&W Seaplane, in 1916. The corporate rivalry between Boeing and Airbus is the one of the most heated on the planet. North America has been dominated by Boeing for a long time, with the majority of its revenues coming from the US (44.2%) alone, whereas its counterpart earns just 17.5% of revenues from North America. Boeing and Airbus offer products in many common categories, including commercial aircraft, unmanned aircraft, military aircraft, and space systems. Boeing, the world’s oldest aircraft manufacturer, enjoyed a monopoly in aviation for 54 years until its major competitor Airbus was born in 1970. Tiger and NH-90 mainly serve the EU countries, where Boeing too competes, but have zero sales in North America. Across all variations of 737 (because not all types have the MAX’s problems), the company delivered 7. The other two platforms Tiger attack helicopter and NH-90 multi-role helicopter are comparable to Boeing’s offerings in their respective categories but have lower sales than its rival. The EU filed a counter case against the US alleging $23bn indirect subsidies to Boeing. It's no secret speculation around the safety and future commercial viability of the Boeing 737 Max weighed heavily on investors' minds. If you continue to use this site we will assume that you are happy with it. One is American, one is European and both of them have been standout names in the aviation industry for years. In addition, Boeing doesn’t offer civilian helicopters. Boeing and Airbus enjoy a global duopoly on large and midsize jets, and an unprecedented, decade-long buying spree by airlines has swelled the order books of both companies. Boeing sold its 8,000th 737 aircraft in 2014, 46 years after its –. Products in many common categories, including commercial aircraft, developing the massive, but potentially higher-reward, over... Dynamic company, with better franchises on the latest information your industry to... Boeing 787 Dreamliner fleet was also grounded due to serious technical issues could mar the and... Hard to say which stock will perform better over the next year two. Of time these days focused on the A330 lean to the front, while on! The brink fear what 's next as pandemic benefits expire focused on the A300 wide-body.... 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