Airbus vs Boeing Product Strategy Paper

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Utah Valley University *

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2150

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Business

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Apr 3, 2024

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docx

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Running Head: Airbus vs Boeing Product Strategy Paper 1 Airbus vs Boeing Product Strategy Paper Elliott Mefford Utah Valley University Aviation 2150 151: Aviation Management Dr. Ryan Leick 3.1.2024

Airbus vs Boeing Product Strategy Paper 2 Airbus vs Boeing Product Strategy Paper The global commercial aviation industry, dominated by the fierce competition between Airbus and Boeing, stands at a critical juncture. Both manufacturers have been pivotal in shaping the aviation landscape, with their aircraft gracing the skies across continents. In this essay, we delve into the industry forecasts, aircraft sales, and deliveries to assess which firm is better positioned to meet the future demands of the commercial transport aircraft industry over the next two decades. To predict the trajectory of Airbus and Boeing over the next twenty years, it is imperative to understand industry forecasts. As of the latest available data, the global demand for commercial aircraft has been on an upward trend, driven by factors such as economic growth, rising middle-class populations, and an increasing appetite for air travel in emerging markets. Both Airbus and Boeing have anticipated this demand and have adjusted their production rates accordingly. Airbus, with its diverse product portfolio, has been agile in responding to market demands. The Airbus Global Market Forecast predicts demand for 39,000 new aircraft over the next 20 years, with a total market value of around $5.9 trillion. This forecast accounts for growth in air travel and the need for more fuel-efficient and environmentally friendly aircraft. Boeing, on the other hand, has been slightly more conservative in its forecast. The Boeing Current Market Outlook projects a demand for 43,610 new airplanes over the next two decades, with a total value of $7.2 trillion. Boeing emphasizes the need for more efficient and versatile aircraft to meet the demands of both established and emerging markets. Examining the recent sales and deliveries of both manufacturers' flagship aircraft lines provides crucial insights into their market positions. Airbus's A380 and Boeing's 747-8 have faced challenges in the realm of large-capacity aircraft. The A380 once hailed as the epitome of luxury air travel, saw sluggish sales, leading Airbus to announce the discontinuation of its production. In contrast, Boeing's 747-8, while facing a similar trend of reduced demand for large

Airbus vs Boeing Product Strategy Paper 3 aircraft, has found a niche in cargo operations. However, both manufacturers have shifted their focus to more fuel-efficient and versatile models. The mid-sized, long-range segment has been a battleground for Airbus's A350 and Boeing's 787. Both aircraft have garnered substantial orders, reflecting the industry's shift towards more fuel-efficient and technologically advanced models. The A350 and 787 have been well-received by airlines seeking improved fuel efficiency, reduced operating costs, and enhanced passenger comfort. In times of economic downturns, airlines often face financial constraints, and passenger demand may dwindle. In such circumstances, the preference tends to shift towards more fuel- efficient aircraft that offer cost savings. Airbus, with its A320neo family and A350, has been successful in meeting this demand, providing airlines with modern, fuel-efficient options that can help mitigate operational expenses during challenging economic periods. Boeing, too, has positioned itself well for economic downturns, particularly with the 787 Dreamliner. The Dreamliner's emphasis on fuel efficiency, advanced materials, and lower maintenance costs makes it an attractive choice for airlines looking to streamline their operations and enhance cost- effectiveness during tough economic conditions. In periods of economic prosperity, airlines may prioritize expansion, opening new routes, and enhancing passenger experience. Airbus, with its diverse product range, is well-equipped to cater to airlines' varying needs during strong economic times. The A350, known for its range and efficiency, can support long-haul routes, while the A320neo family provides flexibility for short to medium-haul operations. Boeing's strength during robust economic conditions lies in its ability to offer a broad spectrum of aircraft, from the efficient 737 family to the versatile 777X. Airlines seeking fleet expansion and modernization during favorable economic climates may find Boeing's comprehensive product line appealing. Both Airbus and Boeing have adapted to industry trends, incorporating advancements in technology, fuel efficiency, and passenger comfort into their product strategies. However, a few

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Airbus vs Boeing Product Strategy Paper 4 factors may influence their future success. Airbus's focus on innovation and sustainability positions it well for the future. The A350, with its composite materials and advanced aerodynamics, reflects Airbus's commitment to environmental responsibility. The emphasis on a diverse product range, from single-aisle to large-capacity aircraft, allows Airbus to cater to the evolving market needs. The success of the A320neo family has solidified Airbus's position in the narrow-body market, a segment that continues to drive demand. Boeing's strength lies in the versatility of its product portfolio, addressing a wide range of market segments. The 737 MAX, despite past challenges, remains a cornerstone in the narrow- body market. The 777X, with its long-range capabilities and fuel efficiency, positions Boeing competitively in the wide-body market. The 787 Dreamliner's success further strengthens Boeing's foothold in this segment. Boeing's extensive experience and partnerships in the defense and space sectors provide additional revenue streams, contributing to overall resilience. In conclusion, both Airbus and Boeing have navigated the turbulent skies of the commercial aviation industry, adapting their strategies to meet the demands of an ever-evolving market. The future success of these manufacturers hinges on their ability to innovate, respond to environmental concerns, and address the changing dynamics of air travel. Airbus's commitment to sustainability and a diverse product range positions it favorably for the future, especially as the industry places increasing emphasis on environmental responsibility. Boeing's versatility, backed by a comprehensive product portfolio and a strong presence in defense and space, ensures its resilience in market fluctuations. The evaluation of each manufacturer's position during economic highs and lows underscores the importance of a balanced product strategy. While both Airbus and Boeing have strengths that cater to different market conditions, it is their adaptability and responsiveness to emerging trends that will ultimately determine their success in the dynamic and competitive world of commercial aviation. As the industry continues to soar into

Airbus vs Boeing Product Strategy Paper 5 the future, the race between Airbus and Boeing will undoubtedly remain a captivating spectacle in the skies. References Bhasin, H. (2018, March 6). Marketing strategy of Airbus - Airbus Marketing Strategy. Marketing91. https://www.marketing91.com/marketing-strategy-airbus/ Boeing company - Boeing reports commercial orders and deliveries ... (n.d.). https://investors.boeing.com/investors/news/press-release-details/2023/Boeing-Reports- Commercial-Orders-and-Deliveries-for-2022/default.aspx

Airbus vs Boeing Product Strategy Paper 6 McLaughlin, J. (2023, November 29). Boeing marketing strategy: Aerospace Marketing Takes flight. Brand Credential. https://www.brandcredential.com/post/boeing-marketing-strategy- aerospace-marketing-takes-flight Oestergaard, K. (2024, February 15). Airbus and Boeing Report December and full year 2023 commercial aircraft orders and deliveries. Flight Plan. https://flightplan.forecastinternational.com/2024/01/15/airbus-and-boeing-report- december-and-full-year-2023-commercial-aircraft-orders-and-deliveries/ TBH, T. (2023, October 7). Marketing strategies and marketing mix of Boeing. The Brand Hopper. https://thebrandhopper.com/2023/10/07/marketing-strategies-and-marketing-mix- of-boeing Team, M. S. (2016, December 22). Airbus Marketing Strategy & Marketing Mix (4PS). https://www.mbaskool.com/marketing-mix/products/16857-airbus.html Urrutia, K. (2024, February 9). Boeing marketing strategy: Reaching New Heights. Voy Media. https://voymedia.com/boeing-marketing-strategy/

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