Airbus Struggles to Capitalize on Boeing’s Challenges Amid Supplier Issues

Airbus is facing unexpected hurdles as it tries to leverage Boeing’s current vulnerabilities, according to Christian Scherer, head of the commercial airliner division at Airbus. Despite Boeing’s significant setbacks, including a dramatic 35% drop in stock this year following a safety incident with a 737 Max 9 plane, Airbus has only seen a modest decline in its stock by 3%, after having risen by over 20% earlier in the year.

In an interview with the Wall Street Journal, Scherer expressed his frustration with the pace of Airbus’s production, hindered by supplier bottlenecks. “I thought we were going to be in a better place,” Scherer remarked, highlighting the challenges of managing present operations while planning for the future.

Initially, Airbus aimed to accelerate production to consolidate its market position after the Federal Aviation Administration mandated Boeing to slow down its production due to safety and quality-control issues. However, Airbus has had to lower its delivery forecasts as it grapples with its own quality concerns and supplier delays.

Key suppliers like Pratt and Whitney have exacerbated these challenges with significant engine recalls. This has had costly implications for carriers such as Spirit Airlines, which anticipates recouping up to $200 million due to the inability to utilize many Airbus planes in its fleet while these issues persist.

Despite these challenges, Boeing remains a formidable competitor in the aerospace sector. Recent analysis from Bank of America describes Boeing as “too big to fail,” citing its status alongside Airbus as part of an essential international duopoly in the commercial airliner market. Moreover, suppliers like engine maker CFM have shown reluctance to expand significantly with Airbus, fearing potential future ramifications on their relationships with Boeing.

This scenario illustrates not just Airbus’s difficulties in seizing a market advantage during Boeing’s downturn but also the complex dynamics of the aerospace supplier network and the resilience of established market leaders.