Airbus vs. Boeing: A Battle for the Sky

1. Introduction

With 2,000 airlines operating at around 3,700 airports across the globe, the commercial aircraft industry is the back bone of the aerospace businesses. And with dramatic increase in population and diminishing of workplace boundaries by globalization, the needs for cost and time effective long-distance mobility has become higher than ever before. Adding all of these factors, Persistence Market Research (PMI) in their report stated that the size of global commercial aircraft market is projected to US$330 billion in 2022, a 4.1% growth from 2017. 1

At the center of the whole commercial aviation industry is the manufacturing and sales of jet aircraft. In this business two firms; American The Boeing Company and European Airbus, have dominated the manufacture of medium to large commercial aircraft for decades, with a combined 24,600 aircrafts delivered in 2018, ranging from single-aisle jets seating of 100-200 passengers to twin aisle very large aircrafts (VLA-class) with maximum capacity nearing 800 passengers. The latter “super jumbo” class is a strategic commitment of more than average interest for its sheer size, irreversibility and potential impact on industry structure. Thus by studying this segment of the jet manufacturing industry, we can have a broader image on the current state of the industry, strategies of the key players, and the future projections of the industry as a whole.

In this post, we are going to start the narration by a brief history of the key players (Boeing and Airbus), their rivalry to enter the VLA-class segment and its impact to the industry.

2. Boeing and Airbus: rulers of the jet aircraft manufacturing industry

2.A Boeing

Boeing’s origin dates to 1916 when the American timber merchant William E. Boeing founded Aero Products Company shortly after he and U.S. Navy officer Conrad Westervelt developed a single-engine, two-seat seaplane, the B&W.2 Renamed Boeing Airplane Company in 1917, the enterprise developed and built technology that became the center of U.S. Navy involvement during World War I. Prior to and during World War II, Boeing Airplane build several famous commercial aircraft, marking their entrance to the commercial aircraft market.

Boeing logo.png
Fig. 1 With their core competency in military grade airplane prior to the first world war, Boeing expanded their products to commercial aircraft by the beginning of the second world war.

Facing fierce competition and expanding market for commercial aircraft sector, Boeing developed an airliner powered with long range turbojets and introduced this new technology to the market for the first time in their Boeing 707 product line. Following its introduction in 1965 on a Pan American transatlantic route, this aircraft become the dominant model used by the majority of American commercial airlines in the 1960s. This success, followed by company’s affinity for innovation, propelled the company to the position of monopoly, until a consortium of European Aircraft makers called Airbus Industrie introduced in 1970.

2.B Airbus

To fill a market niche for short to medium-range, high capacity jetliners, European aircraft manufacturing consortium was made under the name of Airbus Industrie in 1970s. The airbus program itself began five years prior, when the government of France and Germany discussed the formation of a consortium of European jet transport manufacturer with Sud Aviation, Arge Airbus and Hawker Siddeley Aviation at the center of it. Airbus Industrie management company was set up with a unique form of partnership instituted by French law in 1967. Originally, 50 percent of the funding came from French aerospace and missile makers, the other half came from Germany’s Deutsche Airbus. Later, companies from other European countries like Spain and Britain joined the partnership.3

After its conception Airbus went on developing world’s first twin-engine wide body airliner with a capacity of 250 passengers, the Airbus A300, and introduced it to the market in 1974 with Air France as its first customer. Unfortunately, Airbus A300 sold poorly, mainly because industry concerns about this new and unproven manufacturer. Then Airbus get a boost when it launched a program to develop a smaller-capacity, medium-range plane, the A310. By introducing this product line, Aiburs Industrie was able to offer the advantages of a medium-size aircraft family until the development of world’s largest passenger airliner Airbus A380 in the end of the 1990s.

Fig. 2 Created with a unique form of partnership of many Europeans aircraft and military grade missile maker, Airbus survival and activities is a crucial part of European’s strategic interests to compete in not only commercial aircraft sector but also aerospace business in the general.

In its earlier years, governments of the member countries often provided Airbus with aid by giving them loans to promote their high-investment R&D activities and thus securing airbus activities on the market segment. This “unfair advantages” is the base of recurring trade disputes between the United States and Europe concerning on rivalry between Airbus and Boeing, that resulted on a signed agreement on trade in civil aircraft in 1992 that limited government subsidies for aircraft production.

3. Development of Airbus A-380

3.1 Long rivalry between Airbus and Boeing

Almost half century ago in 1969, two type of exotic aircraft was introduced almost in the same time, the American wide-body commercial jet airliner Boeing 747 and European turbojet-powered supersonic passenger airliner the Concorde. These two aircrafts mark the philosophical differences between American and European aircraft manufacturer. The difference that marked the beginning of their deep and long rivalry today.

Boeing 747, nicknamed “Jumbo Jet”, is the first double decker plane with capacity to over 400 passengers, almost double the capacity of Boeing’s own mega hit product the 707. In the time it was introduced, Boeing 747 offered the highest luxury in terms of space as it was built with comfort first. Plus, the impact of economies of scale of this airplane revolutionized airliner’s ticket pricing, making flight cheaper and accessible to even broader consumer.

In contrast Concorde, introduced by BAC and Sud Aviation (the latter become one of the original member of the Airbus consortium), was engineered to be fast. So fast that it had a maximum speed twice the speed of sound. To be able to reach this kind of speed, Concorde had to be built in a sleek design, causing its small capacity of 92 to 130 passengers per flight.


3.2 The state of commercial aircraft in the 1990s and development of Super Jumbo Jet

In 1990s, almost twenty years from their introduction, both 747 and Concorde had lost it edge. The Concorde, after years of financial difficulties caused by high running and maintenance cost and a devastating crash in Paris, was grounded. The 747 lost its luxury edge, instead it was an aging work horse, used for mass transport rather than a comfortable spacey carrier for the higher class.

Predicting large growth in global demand for the future of commercial aviation, Airbus, by then having no jumbo jet to compete with Boeing’s 747 in the very large aircraft (VLA) market, began to study the feasibility of launching a super jumbo jet capable of holding 500 to 1000 passengers. In the same time, realizing their outdated line of product, Boeing independently started their own research on the next generation of VLA-class carrier that can outmatch their past success. Both manufacturer agreed on one thing: super jumbo jet can solve the increasing congenstion at major hubs like New York, Los Angeles, London and Tokyo. This lead to them agreeing to collaborate on a joint feasibility study for a VLA that could hold from 550 to 800 passengers.4

But fundamental disagreements on the future of the commercial mobility services between this two firms ended this fruitless collaboration, forcing both firms to independently research their own super jumbos product design. Without any VLA-class carrier to offer, the pressure to develop this next generation of super-sized air carrier is on Airbus. This force them to move quickly in their decisions to pursue the super jumbo jet, while Boeing, still wishing to stretch the life cycle of their very successful product, cut in the middle of two dilemmas, develop a highly efficient plane with smaller capacity or create an all new super jumbo jet to replace their old 747.

3.3 The future of Boeing product lines

In the end of 1990s, Boeing stated that it believes in the future where air travel shifts from current hub-to-hub flight to point-to-point flight. To realize this vision, they put their effort in the development of 787 Dreamliner, a highly efficient plane designed for long distance travel in expense of its small capacity of 200 passengers, seemingly put aside their ambition to develop their own super jumbo jet.

But this statement is not completely true as in January 1997, Boeing announced that they are cancelling the development effort of next generation of VLA-class carrier. Noted that this cancelled development effort never formally announced, thus shocked the whole industry when the news of the cancellation broke out.5 In 1999, however, Boeing reversed course now stated that they were going to build a stretch jumbo at a cost of $4 billion called the 747X-Stretch. With capacity of 520 passengers, Boeing 747X Stretch was designed to be an extended version of 747 product line with 125 percent larger capacity. Boeing stated that this super jumbo jet will be available by 2004, two years ahead of Airbus’ A380.4 Unfortunately, this never happened. 747X family was unable to attract enough interest thus never really took off from their development ground. The technology developed was later used in the development of wide-body jet liner 747-8 that was introduced five years after the Airbus’ A380 in 2010.

Boeing 747x stretch
Fig. 3 The concept of 747X-Stretch, a super jumbo airplane by Boeing. Corporate indecisiveness caused Boeing late entrance to the VLA-class carrier market.


3.4 Airbus A380: an engineering marvel

Motivated to challenge the current de facto ruler of VLA-class, Airbus forged ahead with their plan on the development of super jumbo jet. The first super jumbo A380 is designed to be 35% larger than Boeing 747 with 555 passengers in the standard three-class configuration, with luxury areas like lounge, bar, and even a waterfall, and could provide non-stop service from Sydney to Los Angeles, Singapore to London Heathrow, New York to Tokyo, or Paris to Hong Kong the most packed long distance route at that time. People argued that such a dream was impossible, that this new beast will be too heavy to be able to even lift off the ground. And even if by any chance it succeeds technologically, the cost of the flight will be too high. This is where the A380 development team showed their resilience and brilliance.

First question that they have to answer is simple: how can an airplane have that kind of capacity? To answer this, they created many out of the box designs, like the horizontal double-bubble among others but in the end they went with the history making concept the full length double decker passenger cabin.

Fig. 4 Earlier concept called the horizontal double-bubble (left). And the design of today’s Airbus A380 (right).

Furthermore, for this megastructure to fly long distance, Airbus knew from start that they have to rethink the materials, while still keeping the development and product price as low as possible. Facing this challenge, the engineers gazed upon Asian manufacturers, especially companies in Japan, China and South Korea. Even though these Asian manufacturers were relatively new, unexperienced player in the industry at that time, A380 development team soon realized that these companies had the technology required to build ultralight body component for their A380 design. With deep knowledge in the field of carbon fiber materials, Koito Industries and Manufacturing, Jamco corporation, Mitsubishi Heavy Industries, Toray and many other Japanese companies played a major role in the success of this program.

  1. Battle for the dominance over the sky

The deep rooted rivalry between Airbus and Boeing still impact the commercial aircraft industry in a big way, as even until today, these two manufacturers are the de facto ruler of the whole aviation industry. Though relatively younger, Airbus, who played a catch up game in the 70s, lead the market share today with 53%, while Boeing was positioned slightly behind with 47%. But combined their rule over the industry is unchallenged. Between 1989 and 2018 period, these two companies have delivered over 24,600 aircrafts, creating practically the whole commercial aircraft fleet in the globe.

Fig. 5 It is a close call at best but in the last ten years Airbus leading in term of orders.

Airbus decision to move quick in their development of VLA-class carrier proves to be profitable as Airbus’ A380 is currently leading the market with 228 super jumbo jet delivered while Boeing 747-8 only have half the number.9 This result can be rationalized as airline companies see this kind of heavy class carrier as a very expensive investment with long product life cycle. Thus, faster introduction time plays a major role in the success of the product.

With the increase of global population and standard of living the needs for reliable and cost effective commercial flight will only keep growing in number, and so do the needs for reliable aircraft.  Thus, the half century old rivalry between Boeing and Airbus will continue to usher in the future of air mobility.


  4. Airbus vs. Boeing in Super Jumbos: A Case of Failed Preemption. Harvard business School Strategy Working Paper Series.
  5. Boeing’s 747 Decision Shifts Rivalry with Airbus. The Wall Street Journal. 1/22/97
  6. Airbus versus Boeing revisited: international competition in the aircraft market. Journal of International Economics.


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