Insight: Boeing is fighting multiple battles

Boeing is fighting multiple battles on competitive, regulatory, political, legal, media, and internal issues across almost all of its product lines. Let’s examine some of the battles the company is currently fighting, and how they might impact the near-term and long-term future of the company.

COMPETITIVE BATTLES

Boeing and Airbus have been in an effective duopoly in the commercial market for the last 24 years since Boeing acquired McDonnell Douglas. While that is likely to change in the future as COMAC introduces the C919 in China, the current duopoly continues today. The battle Boeing

is fighting with Airbus has both product and political elements. On the latter front, Airbus and Boeing have reached a truce with respect to multiple World Trade Organization disputes being settled between the parties. With the WTO disputes off the table, the competition focuses on products and pricing.

From a product line-up standpoint, Airbus now has a sustainable advantage in the narrow-body market, with a tremendous lead over Boeing in terms of order backlog, driven by the extremely successful A321neo family, accounting for the bulk of 757 replacements, including all three US majors that are 757 customers. While the 737 MAX backlog has begun to grow again in recent months, it remains well behind the A320neo family. A key concern is how profitable those new MAX orders are amid rumors of exceptionally high discounts to key customers. Advantage Airbus.