Sunday, August 10, 2014

Boeing vs. Airbus: Whose Strategic Vision Is Becoming Reality?

BOEING VS. AIRBUS

Eight years ago, I wrote my first-ever blog post, "The Future, According to Boeing and Airbus." My point was that the two competing jet manufacturers had entirely different views of what air travel would become in the future, and those visions fueled their product planning and marketing strategy. At the time, I believed Boeing's prediction that passengers would prefer to fly regional jets, point-to-point, rather than Airbus's vision of jumbo jets flying hub-to-hub.

Today's New York Times has a long article about just this topic. The marketing chief for Airbus's jumbo A380 is quoted as saying: “The A380 is not made for every route, but it is ideal for high-traffic routes, high-volume routes that are congested, or where there are flying constraints.” Airbus designed its jumbo jet specifically for a vision of the future in which airlines would fly large groups of passengers from one hub city to another, and then the passengers would fly on smaller planes to their final destinations.

Unfortunately for Airbus, that future has not become a reality. The company's biggest A380 airline customer, Emirates, has invested heavily in these jumbo jets for hub-to-hub flights. Its 380s have luxury touches that appeal to affluent business and first-class passengers. Very few other airlines have followed the Emirates model, however, in part because their customer base is different and in part because airports must make some modifications to welcome the A380.

Meanwhile, Boeing's vision of point-to-point flights has become the reality for many airlines and in many parts of the world, and that's the vision it followed when originally designing the 787 and tweaking the 777. The 777 has attracted 245 orders already in 2014.

Still, the 787 Dreamliner has had a bumpy launch, with high-profile battery problems and  reliability reportedly at only about 98%, compared with more than 99% for the well-established 777.

What next for the Airbus A380 and Boeing 787?

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