Airbus missed its chance to dominate the commercial aircraft industry

It is hard to imagine a better opportunity for Airbus. Its rival Boeing has been in crisis for years. Its 737 MAX was grounded following two crashes in 2019 and 2020 and then again in 2024. Whistleblowers revealed safety issues. It overhauled its management. Even so, in a brutal 2024, the share price fell from $260 to as low as $155 as the firm racked up annual losses of more than $11 billion. A firm that once seemed impregnable appeared to be spiralling into irreversible decline. In the last few months, Boeing staged a remarkable comeback. In April, it recorded its first lead in deliveries since 2023, shipping 143 aeroplanes for the first quarter of the year, 29 more than Airbus, and its widest quarterly lead since 2018.

For Airbus, the French-based consortium of which Britain is a crucial part, that must have been disappointing. With its great rival in so much trouble, it had the perfect opportunity to take a dominant position in the global market for passenger jets. It should have been seizing that, delivering more and more aeroplanes, and booking long-term orders, until it had 60% or more of the global market. Instead, it got snarled up in production delays of its own. Now it is paying the price. Boeing is back on level terms again and may well be ahead of Airbus for the rest of this year.

It is not all bad news for Airbus. Last month, the A320 family became the best-selling commercial jet of all time, overtaking Boeing's 737, with 12,260 deliveries since it was introduced in 1988. Airbus still has a strong range of fuel-efficient, modern, safe aeroplanes that are popular with airlines around the world. Even so, investors are starting to feel the impact of Boeing's recovery. Its share price is up by 5% over the last six months, while Airbus's is down by almost 20%. Airbus lacks the killer instinct.

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It's not going to get any easier over the next few years. Few people are taking it seriously right now, but China is putting huge resources into the commercial aerospace industry. Comac, its national champion, has already launched the C919, a direct competitor to the A320 and the 737, and it is now in service with Air China and China Southern. It's planning the C939, a competitor to the larger A350 and Boeing 777, for long-range routes. Earlier this month, it landed its biggest export deal so far with a major order from Vietnam. Comac is guaranteed a huge domestic market and it can probably do just as well in countries where China has a lot of political and commercial influence.

Airbus won't have another opportunity like this

Russia is trying to get back into the industry too. Last week, it announced it was planning a new jet from Tupolev, a relic of the Soviet era now trying to stage a comeback. Under sanctions, Boeing and Airbus have stopped supplies of parts and new aeroplanes to Russia, so it either has to start making its own, or else would eventually have to start buying from Comac instead. Either way, the days when the industry was a cosy duopoly between Airbus and Boeing are now in the past. It is about to become a three-way, and possibly four-way fight for every order.

Airbus should have been entering that era from a position of dominance. It could have seized on Boeing's woes to take a clear lead in the industry, tying up the major airlines with long-term contracts for new aeroplanes, and locking them into its range so that it would be too expensive for them to contemplate switching to new suppliers. It could have ramped up production and replaced orders Boeing was not able to deliver on. It could have taken the opportunity to launch new models, which would have sewn up the market for years to come. The chance to dominate the industry for a generation or more won't come again.

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