Airbus is facing challenges in fully capitalizing on the turmoil affecting Boeing, its primary competitor. In a recent interview with the Wall Street Journal, Christian Scherer, the head of Airbus's commercial aircraft division, expressed frustration over the company's struggles to resolve supplier bottlenecks that hinder the rapid production of jets.
"I thought we were going to be in a better place," he remarked to the publication. “There’s the whole future to prepare, but now there’s also the present to manage much more than we thought.”
Despite Boeing's stock plummeting over 35% this year
following a significant incident involving a door plug detaching from one of
its 737 Max 9 aircraft, which attracted considerable scrutiny from both the
public and investors, Airbus's stock has also seen a decline, albeit a more
modest 3%.
This decrease is notable, especially considering that Airbus shares had risen over 20% earlier in the year. Following the door plug incident and the Federal Aviation Administration's directive for Boeing to significantly reduce production rates to enhance safety and quality control, Airbus announced its intention to accelerate its output to strengthen its competitive edge in light of Boeing's recent challenges.
However, Airbus is now finding it difficult to meet its
production targets, leading to a revision of its delivery forecasts as it
grapples with its own quality control issues. Suppliers such as Pratt and
Whitney, which have faced significant engine-related recalls, are contributing
to these delays, sometimes at a considerable cost.
For instance, Spirit Airlines has indicated it may incur
losses of up to $200 million due to its inability to operate many Airbus
aircraft in its fleet while these issues remain unresolved. Nonetheless, this
is not the sole factor at play.
Boeing may be experiencing challenges, but it remains a
significant player in the industry. Although there are emerging competitors in
the commercial airliner sector, such as Brazil's Embraer, Bank of America (BAC)
has asserted that the American manufacturer is "too big to fail,"
given its position as part of a global duopoly.
For example, CFM, a prominent engine manufacturer, opted to
forgo potential profits by not seeking additional contracts with Airbus,
prioritizing its relationship with Boeing in anticipation of the latter's
eventual recovery.
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