Boeing vs Airbus: comparing the duopoly

While Airbus remains stable, Boeing continues to grapple with the repercussions of past crises, specifically linked to its 737 Max series. Here’s a closer look at the current state of both companies.

Orders and deliveries

Analysing the orders and deliveries of the two companies has always been a popular metric to find out which of the two is performing better, so what better way to start than here?

As of August 2024, Boeing has managed to secure a relatively low number of new orders, with just 122. Comparing this number to last year's figures of 510 net orders, the image becomes clearer that this isn’t a great period for Boeing.

Similarly low numbers can be found when looking at the company’s deliveries to customers, with just 250 aircraft successfully delivered. Once again, this is a decrease on the previous year's statistics at this point in the year, where it achieved 344 deliveries.

This leaves Boeing with 5,490 outstanding orders for its aircraft, primarily made up of 737 MAX models. Boeing’s troubles stem largely from its 737 Max model, whose reputation remains tarnished after two major crashes—the Lion Air Flight 610 and Ethiopian Airlines Flight 302—that killed hundreds of passengers in 2018 and 2019.

In more recent developments, a January 2024 incident, where a panel covering an emergency exit blew off a 737 Max 9 during a flight, reignited safety concerns and prompted the Federal Aviation Administration (FAA) to impose stringent inspections on both grounded and newly manufactured 737 Max aircraft. This scrutiny, along with regulatory hurdles, has stifled Boeing’s efforts to increase production rates of the 737 Max and commercial confidence in the company, directly impacting its overall delivery and order numbers.

In contrast, Airbus continues its upwards momentum on the production front. By August 2024, the European manufacturer has managed to book 413 new orders and deliver 447 aircraft. Comparing this to last year's figures, which reached 433 deliveries, shows a small improvement in production, but an overall decrease in net orders. This time last year Airbus had reached a staggering 1,218 orders for new aircraft, however, this decline can be taken with a pinch of salt considering 2023 saw a global record for aircraft orders, attributed to the unique circumstances of the COVID-19 global pandemic. In both years, however, Airbus has been the clear victor in orders and deliveries and has retained its higher cut in both these areas this year.

Airbus’s 8,564 outstanding orders—far surpassing Boeing—also highlight its strong position in the market. The company has focused recent efforts on expanding production, particularly targeting fast-growing regions like Asia.

Yet, despite Airbus’s capacity to increase deliveries, it faces its own challenges, suffering somewhat from its own success. Due to high demand and existing commitments, the manufacturer is effectively at full production capacity for the foreseeable future, limiting its ability to capitalise further on Boeing’s setbacks. This backlog could take over a decade to clear, which, while securing its future, prevents Airbus from making immediate gains despite its market advantage.

What are the stocks saying?

Stocks are usually a telling sign of the public perceptions of a company, as well as showing how well a company is doing overall. So, what is this metric telling us in the Boeing vs Airbus brawl?

Overall, the financial gap between the two companies has widened over the past year, largely reflecting their respective operational challenges and successes.

Boeing's stock price has suffered in recent times, declining by 22.88% year-on-year as of September 2024. This drop can be attributed to its ongoing challenges with the 737 Max, delays in addressing safety issues, and a hesitant recovery strategy. These factors have not only hurt investor confidence but have also led to broader questions about Boeing's long-term stability.

On the other hand, Airbus's stock price has increased by 6.99%, reflecting its ability to secure orders and maintain stable operations. While the company's backlog presents capacity challenges, it has avoided significant controversies or operational failures. This stability has translated into a more favourable market outlook and growing investor confidence.

The aviation manufacturing landscape

The duopoly between Boeing and Airbus continues, but the balance has clearly shifted towards Airbus. Airbus now commands an estimated 60% market share, while Boeing is left fighting to regain ground. As for any external threats, the situation looks pretty bleak, with the only China’s COMAC being a potential competitor in the coming decades, expected to gain a 1% market share by 2030.

Boeing’s ongoing production issues with the 737 Max have allowed Airbus to strengthen its position in the market. Despite securing a steady stream of new orders, Boeing is constrained by regulatory scrutiny and production delays, limiting its ability to compete effectively with Airbus in the short term.

However, despite its market advantage, Airbus’s capacity constraints are significant. With its production lines running at full capacity and a large backlog of orders, the company faces challenges in scaling up further to meet the demand spike resulting from Boeing’s setbacks. Still, its operational stability, coupled with its expanding influence in markets like Asia, bodes well for its long-term growth​.

The road ahead

Looking ahead, both companies face distinct challenges and opportunities. Boeing must focus on rebuilding trust and addressing safety issues surrounding the 737 Max. Its ability to regain market share depends heavily on how it navigates these challenges while meeting delivery targets and securing new orders.

Meanwhile, Airbus is in a strong position but must find ways to expand its production capacity if it is to fully exploit its current market lead. Additionally, as the industry faces a growing demand for skilled workers, Airbus will need to manage workforce constraints effectively to keep up with its ambitious production goals

The global aviation market remains complex, with significant growth potential. As Airbus anticipates the global services market to almost double to $290 billion per year by 2043, both companies will need to navigate evolving market conditions to stay competitive​.

In conclusion, while Airbus enjoys a clear advantage in 2024, its production limitations provide an opportunity for Boeing—if it can resolve its safety concerns and regulatory challenges—to claw back some market share in the coming years.