BOEING VERSUS

AIRBUS
HISTORY
In 1967 the government officials representing these three
European countries (France, Germany and Great Brittan) signed an
agreement approving the joint development and production of an
airbus for the purpose of strengthening European cooperation in
the field of aviation technology. (Spain joined in 1971)
In 1916 William Boeing and navy engineer Conrad Westervelt
founded the Pacific Aero Products Company in Seattle, and they
built the B&W seaplane. When one year later Westervelt was
recalled to active service in World War I, the company was
renamed to the Boeing Airplane Company.
COMPETITIVENESS
There are only two firms that share nearly 100% of the market.

In terms of the number of jetliners produced, Boeing wins a clear
victory. This is in no small part
because of Boeings early arrival into the manufacture of large com
mercial jetliners.
More recently, the success of the Boeing 787 Dreamliner has been
in part the result of large orders from several East Asian airlines
such as Vietnam Airlines, Quantas, and All Nippon Airways, and th
e Chinese government.


The Boeing 747 for almost 30 years went unchallenged by Airbus.
Until the development of the A380, Airbus had no plane that could
carry 400+ passengers over distances beyond 10,000 miles.
With little competition, Boeing was capable of charging a higher pr
ice than perhaps would otherwise be the case within a competitiv
e environment.

Perhaps one of the most contentious issues in the competition bet
ween Boeing and Airbus has been subsidization of each firm by the
ir respective governments: The United States militarys indirect s
ubsidization of Boeing, and the French, German, Spanish, and
United Kingdoms direct subsidization of Airbus.
Developing countries have added pressure to create jobs and to bri
ng in foreign direct investment.
Because of Chinas large geographical size and the
level of influence over the airlines by the government, both Air
bus and Boeing have been putting significant effort into sourcin
g subassemblies from China.



Airbus has historically had a unique advantage over Boeing that is often overlooked.
This is Airbus ability to supply financing (through the consortiums member governme
nts) at attractive terms for the purchase of their aircraft. Airbus logic is simple: If airlin
es cannot get the cash, they cant buy their planes. Therefore Airbus began to assist air
lines that could not obtain financing in the global credit markets.
Boeing has had little opportunity to offer up competition for Airbus
attractive financing. Boeing is a private firm, thus they responsibly cannot offer terms
better than Airbus or what the global credit market offers and remain a viable compan
y. Therefore Boeing has had to rely on the U.S. governments
ImportExport bank as a means for assisting struggling airlines to finance Boeing jetliner
acquisitions.
Boeing and Airbus compete so vigorously because they face a marketplace where supp
ly is relatively constant and demand is intermittent; this is made all that much worse wi
th uncertainty.

THANK YOU