The Boeing And Airbus Dog Fight Heats Up Over Orders At The Paris Air Show

by Trefis Team
+9.68%
Upside
124
Market
136
Trefis
BA
Boeing
Rate   |   votes   |   Share
    Quick Take 

  • At the 2013 Paris Air Show, Boeing launched yesterday a larger version of the 787 Dreamliner – 787-10 – to compete against the larger Airbus A350 models.
  • Last week, Airbus A350 had made its first flight with entry in to service scheduled for 2014.
  • Through 787 Dreamliner and A350, Boeing and Airbus are competing for a share of the $2 trillion wide-body commercial aircraft market of the next twenty years.

Boeing (NYSE:BA) announced Tuesday the commercial launch of its larger 787 Dreamliner – 787-10 – at the 2013 Paris Air Show. The aircraft manufacturer made the launch announcement with more than 100 order commitments for the 787-10 from airlines across North America, Europe and Asia. [1]

This comes barely four days after Airbus undertook the first flight of its wide-body airplane model – the A350 XWB – which is designed to compete with Boeing’s wide-body models – 787 and 777. With these major steps, competition between Boeing and Airbus in the lucrative wide-body commercial airplane segment has increased significantly.

In other commercial airplane segments like narrow-body, Boeing’s 737 series already competes neck-to-neck with Airbus’ A320 family of aircraft. At the Paris Air Show, both these players have received multiple orders for their leading narrow-body airplanes. Airbus has also received a mega order worth $8 billion (at list prices) for 20 A380 superjumbos from Doric Lease Corp, a German aircraft leasing company. [2]

See our complete analysis of Boeing here. We are currently in the process of updating Boeing’s analysis and model.

787-10′s Launch Counters A350′s First Flight

The larger 787-10 with a seating capacity of 300-330 passengers has been launched to take on the larger models of Airbus A350 that seat between 314 and 350 passengers in a three-class seating arrangement depending on the model. [3] In comparison, the smallest 787 version – 787-8 – seats 240 passengers in a three-class seating arrangement and the next larger version – 787-9 – seats 280 passengers in a three-class seating arrangement. [4] The 787-10 is expected to enter service in 2018, compared to the A350-900 which will enter service next year.

In terms of noise levels and cost performance, which includes fuel efficiency, both 787 Dreamliner and A350 are top-notch planes. Both are made from carbon composites which makes them lighter and fuel-efficient. While Airbus says that its smallest A350 – A350-800 – is more fuel-efficient than the smallest 787 – 787-8 – with 8% lower operating costs. [5] Boeing’s Commercial Airplanes CEO Ray Conner said yesterday, “The [largest 787 - ] 787-10 is 25 percent more efficient than airplanes of its size today and more than 10 percent better than anything being offered by the competition for the future. [1]

All in all, with Airbus A350 making its first flight last week and Boeing announcing the launch of a larger 787, the competition in the wide-body commercial airplane segment has been raised. In terms of orders received so far, the B-787 trumps A350 by a healthy margin. Through May 2013, Boeing received 890 orders for the 787 Dreamliner and delivered 57 of these while Airbus received 613 orders for the A350 and will start making its deliveries from the second-half of next year. [3] [6]

777X Will Compete With The Largest A350

At the same time, Boeing is continuing to work on an upgraded version of the 777, dubbed as 777X, which will take on the largest A350. This plane which is expected to enter markets by the end of the decade will consume 20% less fuel than today’s 777. The company currently plans for two versions of the 777 – 777-8X and 777-9X. The former will seat around 350 passengers while the latter will seat around 400 passengers. [7]

The table below compares Boeing’s 787 Dreamliner and 777 series with Airbus’ A350 family of aircraft on seating capacity, maximum flying range, price and entry in-service year.

Parameter\Model

Boeing 787-8

Boeing 787-9

Airbus A350-800

Airbus A350-900

Boeing 787-10

Airbus A350-1000

Boeing 777-300ER

Seating capacity  (3-class)

240

280

270

314

300-330

350

386

Entry In-Service

2011

2014

2016

2014

2018

2017

2004

Maximum range

8,200 nmi

8,500 nmi

8,480 nmi

8,100 nmi

7,000 nmi

8,420 nmi

7,930 nmi

List Price

$206.8 million

$243.6 million

$245.5 million

$277.7 million

Not Announced

$320.6 million

$315 million

Through these models, Boeing and Airbus are competing for a lions share of the $2 trillion wide-body commercial airplane market comprising of around 7,950 deliveries over the next two decades. [8]

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Boeing launches 787-10 Dreamliner, June 18 2013, www.boeing.com [] []
  2. Airbus’ A380 is ready to own the sky, June 18 2013, www.airbus.com []
  3. Airbus A350, June 19 2013, www.wikipedia.com [] []
  4. Boeing 787 Dreamliner, June 19 2013, www.wikipedia.com []
  5. Web archive of Airbus’ A350 presentation accessed through wikipedia, December 2006, www.wikipedia.com []
  6. Boeing’s unfilled orders through May 2013, June 19 2013, www.boeing.com []
  7. Boeing twin-aisle family provides unprecedented value, flexibility, June 18 2013, www.boeing.com []
  8. Boeing’s long-term market forecasts, June 10 2013, www.boeing.com []
Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!