The transatlantic rivals face growing global competition for mid-range aircraft but are virtually unchallenged in producing long-distance planes, or those with ranges of 10,000 kilometres or more, that are the most profitable to operate and in growing demand.
With jet fuel prices accounting for about half of airline operating costs, efficiency has become a key selling point. At the Paris Air Show this week, each company sought to outpace the other by promoting its latest products as greener, quieter and cheaper to operate.
US-based Boeing on Tuesday (18 June) announced its newest long-distance jet, the 787-10, the latest version of its 787 Dreamliner series that began commercial service in 2011.
“The 787-10 Dreamliner will be the most efficient jetliner in history,” Raymond L. Conner, chief executive of Boeing’s commercial airlines division, said in introducing the plane at the Paris show. “The 787-10 is 25% more efficient than airplanes of its size today and more than 10% better than anything being offered by the competition for the future.”
The company’s chairman and chief executive, W. James McNerney Jr., said Boeing already had 102 orders for the aircraft that will be delivered starting in 2018.
Europe’s Airbus made similar environmental performance claims about its A350 XWB series, saying lighter composite metals and advanced engines will produce one of the most efficient aircraft ever. XWB stands for extra-wide body, which Airbus said will provide a more spacious ride for the 270 passengers on the aircraft’s shorter model and up to 440 on the stretch version.
Airbus got a head start on the biennial Paris event with test flight of its A350 on Friday (14 June). The company says it has orders for 613 of the advanced aircraft.
“The A350 XWB is fantastic and impressive,” John Leahy, the Airbus chief operating officer, said in a statement after the test flight in Toulouse, France. “Did you hear how quiet it was? We’re going to set new standards with the A350 XWB – not just for comfort and performance, but for environmental friendliness as well.”
Airbus and Boeing anticipate a doubling of aircraft demand over 20 years as passenger numbers grow and airlines seek to capitalise on more efficient engines and aerodynamic designs that reduce fuel consumption. Boeing reported 1,338 total orders in 2012, compared to 914 for Airbus.
Battling higher fuel costs
Competition is growing across the aviation sector for more fuel-efficiency aircraft that are also quieter.
Fuel consumption accounts for about half of operating costs. Jet fuel prices have fallen since hitting $180 per barrel in June 2008 yet have edged up this year, closing on Friday at $121, up 2.6% from a week earlier and 6.5% from a year ago.
Costs in Europe are higher, closing last week at $123 (€92) per barrel, up 7.2% from 2012. The higher prices have cut into airlines’ bottom lines despite a recent improvement in financial outlook for the industry.
Air carriers are also under pressure to reduce emissions. The EU’s Emissions Trading System (ETS) took effect for airlines in 2012, previously applying only to industries and energy companies as a market-based approach to reducing carbon emissions.
The European Commission has suspended the law’s application to international flights arriving and departing EU airports pending negotiations in International Civil Aviation Organisation, the Montréal-based body that sets global standards for air carriers. Even if the EU reverses course on the ETS, it is expected some international deal on global emissions reductions will emerge from the talks.
Airbus and Boeing are not only competing to be fuel efficient. The companies say their newest generations of aircraft offer better comfort for passengers and more flexible layout options for airlines buying them.
These models include updates of the Boeing 747 and 777, and new versions of the company’s Dreamliner. Airbus makes the same claims with the world’s biggest passenger plane, the A380, the new A350 and a revamped A320, the ‘Neo’.
But grand ambitions often conflict with both market and production realities. The introduction of the A380, a hulking double-deck passenger liner that made its maiden commercial flight in October 2007, suffered setbacks in 2011 and 2012 due to isolated engine failures and wing cracks.
In January 2013, the 787 Dreamliner was grounded worldwide for three months because of faulty batteries. Two 787s were in service in Europe at the time, both flown by Polish Airlines.
The two aviation superpowers also face rising competition at the other end of the spectrum, for the medium-range aircraft common on intra-European routes.
Russia’s United Aircraft Corporation is touting its medium-range MC-21 jetliner that is expected to be operational by 2017, with a market focused initially on Asia and the former Soviet republics. Representatives of the 7-year-old firm say the MC-21 will be 15% more fuel efficient than comparable aircraft flown today.
Commercial Aircraft Corporation of China, launched in 2008, is planing production of the C919, the country’s first domestic singe-aisle passenger liner. Bombardier, a Canadian aircraft maker, and Brazil’s Embraer are introducing medium-range jets to complement their traditional fleet of regional jets that generally carry 100 or fewer passengers.
Such competition could spell trouble for Airbus and Boeing in the rapidly growing single-aisle markets now dominated by the Airbus 320 and Boeing 737. Both companies also have records of failing to meet their production deadlines on new models.