By Robert Wall
LE BOURGET, France -- Boeing Co. and Airbus SE suddenly have
competition.
For nearly two decades, the two have had the global market for
big commercial jets largely to themselves. That is all changing,
with three new competitors -- from China, Russia and Canada --
rolling out their own entrees into the so-called single-aisle
market.
Orders for these new jets are few for now, and the Russian and
Chinese makers won't deliver planes for years. The jury is also
still out on how popular they will ever be. Boeing and Airbus,
meanwhile, are selling plenty of their own, tried and tested work
horses in the category.
Still, if even one of these new competing jets is a hit, it
could threaten one of the most lucrative sectors for Boeing and
Airbus.
"I don't have any problem buying Russian or Chinese aircraft,"
if a viable model emerges, Akbar Al Baker, chief executive of Qatar
Airways, one of the world's biggest jet buyers, said recently.
The sudden competition is unfamiliar for both jet makers, and it
adds pressure on them as they face waning demand in other markets.
Bigger, long-haul jets aren't selling nearly as well as
single-aisle, or narrowbody, jets and both Boeing and Airbus have
struggled recently with big cost overruns and delays for some of
their military programs.
The narrowbody market has been the industry's sweet spot for
years. Big airlines and fast-growing budget ones love them for
their size and fuel efficiency. At the Paris Air Show last month,
Boeing introduced the latest and biggest version of its 737 Max,
with 230 seats. Boeing has a backlog of more than 3,600 orders for
its 737 Max family of jets.
Airbus, meanwhile, has sold more than 5,000 of its A320neo
family, the competitor to the 737 Max. It started delivering them
to customers last year.
Amid that booming market, three new players have swept in. China
flew its C919 narrowbody for the first time in early May. The
Chinese jet, built by state-owned Commercial Aircraft Corp., known
as Comac, has secured more than 500 orders, mainly from Chinese
buyers. First delivery is expected around 2020. Comac didn't
respond to requests for comment.
Russia's MC-21, which can seat up to 211 passengers, also made
its maiden voyage in May. It is made by Irkut Corp., which says it
has taken in 175 orders and will deliver its first in 2019 as it
prepares for further tests.
Canada's Bombardier Inc., meanwhile, began delivering a 130-seat
version of its CSeries plane in November. The CS300 competes with
the smallest models of the Airbus and Boeing's short-haul planes.
It is already in service with two European airlines. Bombardier so
far has 237 orders for the jet.
Deutsche Lufthansa AG and Air Baltic executives have praised the
plane's low noise and fuel efficiency.
"The interest level in the program continues to rise," said
Bombardier's commercial-airplanes boss Fred Cromer.
China and Russia have yet to win backing for their planes from
big-name Western carriers. Many of those buyers aren't convinced
the newcomers can in the near term provide the required globally
available spare parts and repair services to keep operations
humming.
Meanwhile, other plane makers, such as Brazil's Embraer, have
avoided going head-on against Boeing and Airbus and stuck to
building smaller airliners.
The Chinese jet may be the most significant threat to Airbus and
Boeing. Its ambitions are underpinned by the government's long-term
focus and deep pockets and a domestic airline market large enough
to keep local aircraft production humming.
"Are they a threat in the next five to ten years to Airbus and
Boeing? Probably not," said Airbus's chief plane salesman, John
Leahy. "In 20 years, I think they will be one of the big three
manufacturers of aircraft."
China has also been working closely with U.S. and European
suppliers. The C919 is powered by engines made by a consortium of
General Electric Co. and France's Safran SA. Honeywell
International Inc. and Rockwell Collins Inc. are also partners.
Like Boeing and Airbus, the newcomers act as integrators of
components made around the world.
The Chinese plane still lags the performance of the newest
Boeing and Airbus jetliners. It is projected to have a shorter
range and be less fuel efficient. But industry officials believe
that will change.
"The Chinese will drastically change the duopoly, but with the
next aircraft, not the C919. With this one, they are going to
learn," said Jerome Rein, partner at Boston Consulting Group.
Boeing is moving some work completing aircraft to China to help
maintain access to the rapidly expanding market. Airbus already
assembles some of its single-aisle planes in Tianjin near
Beijing.
"Our team has to wake up every day to be mindful that
competition evolves and evolves quickly and we have to stay ahead
of it," said its commercial-airplanes boss, Kevin McAllister.
Boeing also has gone after rivals through litigation. The U.S.,
on Boeing's behalf, 13 years ago sued the European Union at the
World Trade Organization for what it calls unfair European
government support for Airbus. The case and a counter-claim, remain
underway.
This year, Boeing challenged Bombardier's sales of a smaller
version of the CSeries, the CS100, to Delta Air Lines Inc. at the
U.S. International Trade Commission. It accuses the Canadian
company of selling the plane below cost.
Bombardier dismisses the accusation, noting that new planes are
often heavily discounted. It also said that Boeing has no standing
to challenge its deal for the 100-seat plane since the U.S. plane
maker has no rival product. The U.S. review is still ongoing.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
July 16, 2017 07:14 ET (11:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Airbus (EU:AIR)
Graphique Historique de l'Action
De Fév 2024 à Mar 2024
Airbus (EU:AIR)
Graphique Historique de l'Action
De Mar 2023 à Mar 2024