Boeing Is Grounded in More Ways Than One
Its 737 Max woes and scrapped venture with Brazil’s Embraer will leave it at a distinct disadvantage to Airbus whenever business bounces back.
Boeing is still part of a duopoly, but Airbus is gaining the upper hand.
Photographer: Jasper Juinen/BloombergThe coronavirus-fueled collapse in air travel has made it highly unlikely that airlines will be adding new jets to their fleets anytime soon. But when the world’s carriers are ready to take deliveries of airplanes and place new orders again, the odds are increasing that those planes will be made by Airbus rather than Boeing.
There are no coronavirus winners in the aerospace market. Airbus SE has said it will cut production by a third and some analysts think even that may not be enough. CEO Guillaume Faury has warned employees that the company is “bleeding cash” and needs to drastically cut costs. Boeing Co. will reportedly announce job cuts and plans to take monthly production of its 787 Dreamliner into the single digits when it announces earnings later this week. Some 17,000 planes — about 64% of the global fleet — are now grounded, according to industry analytics company Cirium. Airlines have warned demand will remain depressed into at least 2021, so we’ve likely only seen the first wave of cancellations and order deferrals. But once people do start to fly again, the emphasis is going to be on smaller, fuel-efficient models. Boeing has little to offer on that front right now.