21 Feb 2020
Posted in Aerospace, Defense & Security
Airbus invests as Boeing suffers another setback, says GlobalData
Following the news that debris has been found in the fuel tanks of stored Boeing 737 MAXs;
Harry Boneham, Associate Analyst at GlobalData, a leading data and analytics company, offers his view:
“The discovery of foreign object debris (FOD) seems to have further justified the recent pivot from General Electric away from Boeing, and the troubled 737 MAX is now beset by yet more uncertainty over its path to recertification. GE has moved towards Boeing’s rival, Airbus, hoping to solicit business supplying engines for Airbus’ A330neo.
Regardless of any possible further delay to the return of the 737 MAX, the primary cost of this discovery is further reputational damage to Boeing. Public concern regarding the safety of the 737 MAX, compounded by ambiguity over the timeline of its return to service, has driven airlines to look to competitors such as Airbus to fulfil their single-aisle aircraft demands. This exodus of customers is clearly exhibited by Boeing’s failure to secure any sales in January 2020, compared to 46 in January 2019. According to Boeing, this is the first time since 1962 that Boeing has failed to secure any sales in a month, and stands in stark contrast to the 274 commercial aircraft sales secured by Airbus in January.
Suppliers also are looking elsewhere for business. General Electric, which produces the engines for the 737 MAX, has been impacted by the grounding and production halt of the 737 MAX, and so is looking to Airbus for new business. The two companies are reportedly in talks over the potential supply of General Electric’s GEnx engines for Airbus’ A330neo.
Furthermore, Airbus’ recent announced that the company would be investing between €500m to €1bn on its A220 passenger jet in 2020, having grown their stake in the programme from 50.1% to 75% earlier that month by purchasing Bombardier’s stake. This announcement arguably serves as an indication that Airbus is endeavouring to capitalise on Boeing’s 737 MAX setbacks, and grow its share of the single-aisle passenger jet market.