Are Boeing And Airbus Building Too Many Planes?

Aviation industry analysts have voiced concern that the recent swarm of wide-body aircraft offerings and orders for Boeing and Airbus have amounted to too much of a good thing. Could they be shooting themselves in the foot by giving airlines too many options?

Still on the rebound from the problematic and delay-plagued A380 and 787 programs, both manufacturers are working to implement updates of older models, in addition to new, state-of-the-art planes. Airbus is building the A350 as it has also begun offering an upgraded A330, called the A330neo. Across the pond in Washington state, Boeing is selling the 787 Dreamliner along with the recently announced 777X.


Boeing's upgraded 777 model, the 777X-9. Image via Boeing

Each manufacturer predicts that 4,500 new aircraft will be needed in the 250-300 seat range within the next twenty years. Some simple math tells us that amounts to almost 19 planes entering service each month. While it will still be a few years before we begin to see those roll off the assembly line, analysts are asking if the upgraded older models will be absorbed as successfully as the newer, state-of-the-art planes. "If everyone persists in going full throttle, there could be serious problems at the end of decade," said Richard Aboulafia, vice-president at Virginia-based consultancy Teal Group.

The A3330neo and 777X are taking their proven but now decades-old model and updating it with new, more efficient engines. The A330 and 777 each first flew in the mid 1990s. These engines will provide more efficient fuel burn and greater range, thereby decreasing the operating cost for the airline. Other updates include aerodynamic improvements such as winglets, and brand new cabin interiors. Above all else, airlines are seeking ways to reduce fuel burn, which is one of their top three operating expenses along with aircraft and payroll.


Airbus A330neo. Photo courtesy of Airbus

The heavy competition is good for airlines, of course, because it drives down prices. Delta Air Lines CEO Richard Anderson is flaunting the possibility of acquiring A330neos in the "high 70s to low 80s [millions]" range, which is roughly a third of the list price Airbus has given for the new aircraft. Delta recently announced plans to retire some of its aging fleet of Boeing 747-400s, which joined its fleet after the airline merged with Northwest, and will be looking to replace that capacity. And while 747s are still being made, many believe Delta will follow the trend of its domestic competitors (American and United) and downsize the replacement planes.


Source: The Penninsula

Top Image: A350 in testing. Image via Airbus

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