Nerves start to fray as Boeing, Airbus see end to duopoly
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Picture the scene; you’re the topdog, enjoying an easy life with no realistic challengers to your supremacy. It’snatural that you get complacent, and start feeling like you own the market. Then what happens? Someyoung upstart comes and shakes up the field, full of new ideas and youthfulvigour. It’s only natural to feel threatened, and get a bit hot under thecollar. This, it seems, it what is happening at Boeing and Airbus right now. Theyhave been top dogs in the commercial plane market for so long, they’veforgotten how to deal with any other competition.
So itwasn’t so surprising to hear both companies hitting out at Bombardier about thesubsidies it receives from the Canadian government for its new CSeries jet.This seems a little rich, especially from Airbus, which receives large subsidiesfrom several European governments for its own jet programmes. It becomes alittle more understandable however, when you learn that the CSeries, Bombardiernew single-aisle jet, is being increasingly viewed as a serious threat toAirbus and Boeing’s ‘cash-cow’ models, the 737 and A320. And where is thisthreat most noticeable? China- the world’s fastest-growing commercial plane market, where demand is beingdriven by single-aisle jets. Already under threat from China’s new domestic planemaker, COMAC, Boeingand Airbus must have been decidedly concerned last week when Bombardier’s CEOPierre Beaudoin, said that the Canadian firm mayopen an assembly line in Chinaas part of wider cooperation with China’s state-run aerospace company.
“If we can do things to collaborate with COMAC, I’m openfor it,” Beaudoin said.
As if the threat of a Chinese state-funded COMAC wasn’tenough, there now appeared to be the likelihood of it sharing expertise and resourceswith Bombardier. Anyone standing outside Boeing or Airbus HQ at the time wouldhave been able to hear the crinkling sound of several executive brows beingfurrowed simultaneously.
Whatever the rights and wrongsabout the issue of government subsidies for planemakers, it is clear that thetwo big boys are certainly getting worried. In years to come, China will becomethe major battle ground in the commercial plane market, and whichever companyexploits this opportunity the best will hold a huge advantage. Bombardier,COMAC, and possibly Embraer, will all be seeking to erode dominance of Boeingand Airbus, and the duo will have to be on their toes to fend off thecompetition. The top dogs are unlikely to have it all their own way for toomuch longer.
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