Airbus Is Coming for Boeing's 737
Bloomberg Businessweek US|December 12, 2022
A proposed A220-500 narrowbody jet and the larger A321 could squeeze the US aircraft giant
James E. Ellis and David Rocks
Airbus Is Coming for Boeing's 737

Designing a new commercial aircraft requires huge financial outlays and years of engineering wizardry, and success isn’t assured, as the short-lived Airbus A380 jumbo can attest. Such missteps—the double-decker jet never recouped its $20 billion in development costs before being dropped in 2019— explain why the aerospace industry’s preferred route these days is to tweak, stretch and reconfigure existing models at a fraction of the cost, rather than take the plunge with an all-new jetliner.

That lower-risk approach turned the Airbus A320neo family, with its new fuel-efficient engines, into the industry’s fastest-selling aircraft, and the stretched A321 model has become a hit with customers seeking a slightly bigger jet without the fuel burn of a widebody behemoth. Now, Airbus SE looks set to apply the strategy to its smaller A220, a model it picked up a few years ago when Canada’s Bombardier Inc. was forced into a fire sale of its troubled prestige project.

Only this time, archrival Boeing Co. has no comeback option, leaving it unusually exposed in a duopoly that for decades thrived on oneupmanship. Saddled with $57 billion in debt and the lingering fallout from two crashes of its 737 Max model, the US plane maker recently conceded it won’t design a new aircraft this decade. That inability to respond will cede vital ground to Airbus as the European company sets out to squeeze its US competitor from above and below, in the market segment that makes most of the industry’s profits: single-aisle jetliners.

This story is from the December 12, 2022 edition of Bloomberg Businessweek US.

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This story is from the December 12, 2022 edition of Bloomberg Businessweek US.

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