Airbus and Boeing

The case study topic is Boeing VS Airbus; first of all, we need to know the brief background of the two commercial aircraft industry. The Boeing: Boeing is established by William E Boeing in 1910. Boeing has been the premier manufacturer of commercial jetliners for more than 40 years and held a virtual monopoly in the field. For decades the Boeing Company has been produced the 737, 747, 767 and 777 families of airplanes and the Boeing Business Jet and the upcoming 787 Dreamliner. Moreover, as the largest US exporter, Boeing has regularly run a substantial positive trade balance with the rest of the world of approximately US$ 15 billion per year. There are more than 12,000 Boeing commercial jetliners in service and serve for more than 90 countries. In 1997, Boeing announced that it would merge with the McDonnell Douglas. The combination was definitely creating a strong US competitor in a competitive global marketplace.

Airbus: the airbus was formally established in 1970 and began as a consortium of four European aircraft manufacturers: British; French; German; Spanish. There are around 5,102 Airbus aircraft in service. Since 1981, Airbus has started to progressively gaining market share and it surpassed Boeing for the first time in deliveries of aircrafts. Boeing, no longer claims a majority of new orders or deliveries. Airbus has thus become the dominant player in the global market .The Airbus company has been produced the A320; A330; A340; A350; new innovation A380 Today which compare to the Boeing 787 dreamliner. Airbus produces around half of the world’s jet airliners. The biggest rival is Boeing. The conflict between the Boeing and Airbus is that the success of Airbus depends on the European government subsidies.

The biggest single factor explaining the rise of Airbus was a type of subsidy called launch aid-- low-cost or no-cost loans that enabled the European company to develop a family of airliners much faster than any purely commercial company could have, while also pricing its planes aggressively. In my opinion, the key issue of develop the aircraft industries is that the costs of a new airliner are huge. Besides, it is hard to keep the stability of the company and maintain the sustainable development of the company. Thus, Airbus, as a new entrant aircraft company, the fundamental development cost is enormous, so if Airbus without the government support they would have suffered many years of losses resulting in a possible bankruptcy. They have no competitive at all because the company should grasp a significant share of world demand to break even. So in order to become more competitive, the company has