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Airbus and Boeing call end to ‘duopoly’

Airbus and Boeing have declared their almost total dominance of the market for large commercial aircraft is over.

Speaking on the first day of the Paris Air Show, Jim Albaugh, head of Boeing’s civil jet division, made the frank admission as Brazilian, Chinese, Canadian and Russian companies are all set to enter the 100-seater- plus market with jets of their own in the next five years. “The days of the duopoly with Airbus are over,” he said.

Tom Enders, Airbus chief executive, agreed but added that the newcomers were not targeting the entire product range of either of the two dominant groups.

He told the Financial Times: “The duopoly is over in the 100 to 150 aircraft segment because this is where the new entrants ...want to be – so that doesn’t mean the duopoly is over in the entire range of products.”

Mr Enders said Airbus would defend its leading market position and that it was doubtful there would be room for six competitors.

“We think sooner or later there will be some consolidation,” he said

The comments came as Airbus unveiled commitments for 126 of its upgraded narrow-body jet, the A320. Airbus announced plans to re-engine the aircraft, at a cost of ?1bn, at the end of last year, with a promise to cut fuel burn by 15 per cent.

Since announcing the upgrade Airbus has had a flood of commitments for the aircraft, including the 126 on Monday, worth $6bn at list prices, bringing the total number to 488. Mr Enders said the response made it Airbus’s most successful programme launch.

The orders were part of a total of $26bn-worth of deals announced by the big two aircraft makers at the show.

The industry is waiting for Boeing to make a decision on what to do with its 737 family of aircraft.

Mr Albaugh said the group was studying two options – re-engining the 737 or developing an all-new aircraft. A decision is expected by early next year.

Mr Albaugh said he was taking the challenge of the new entrants “very seriously” but dismissed the threat from the A320 Neo to the current generation of 737s, saying the two were now “on par”.

Mr Enders shot back: “Jim, that is the biggest joke I have heard from you for some time...I think we have come up with a very good proposition and the reaction of the market says it all.”

The A320 and Boeing’s 737 families, which come in various sizes between 100 and 200 seats, dominate the biggest part of the commercial jet market.

Forecasts see demand for close to 25,000 new jets in the 100-200 seat range, equal to 70 per cent of jet deliveries and worth $2,000bn, over the next two decades.

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