How Did Airbus Recover So Quickly? (Unlike Boeing)

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Airbus is one of the largest aircraft manufacturers in the world having created fan favorites like the Airbus A380. Given the impact of the pandemic on the aviation industry, it's not surprising to see aircraft manufacturers post massive losses. However, Airbus was not only able to reduce their quarterly losses throughout 2020 but even turn profitable by the end of the year. This is in stark contrast to Boeing whose losses have only gone up throughout 2020. From the surface, Airbus' lead with the Airbus A320 and their smaller reliance on wide-body jets seem to have given Airbus an easier path to recovery. The difference between Airbus and Boeing is much deeper though as there is a stark contrast in terms of leadership and company culture. This video explains the differences between Boeing and Airbus and why Airbus was able to recover so quickly from the pandemic unlike Boeing.

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Timestamps:
0:00 - Airbus Recovery
0:49 - A320
3:16 - A380
5:39 - B787
7:48 - Superior Leadership

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Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[makeupbycarlcapellan]

I think Airbus' decision to uphold Quality and Safety over Profit is the main factor of their success. Boeing has cut corners in terms of quality and safety and has shifted their culture to pleasing stockholders from building safe planes.

[Timpon_Dorz]

When you make quality products and not death machines... You tend to do alright

[pilotsam]

They make smart decisions, and actually yesterday received an order for 25 A321Neo from Delta Airlines

[disturbed]

After a major storm it's easier to repair some missing shingles (Airbus) then a missing roof (Boeing).

[igabobalushi]

I like how we can see your thought process throughout your last 10 or so videos. They're all connected

[toastbrotlf]

It's important to add that Airbus is stronger in Asia because of long-held relationshipships. And Asia, especially their aviation market, has been hit much less harder than many regions in the west.

[picklepoppers]

Airbus has refused to compromise on quality and has focused on giving the customers their moneys worth. While boeing has done the opposite by putting in faulty technology that has compromised customer safety. Last year in january i took emirates. From boston to dubai i took a380 and from dubai to dhaka i took boeing 777. The a380 was much superior in comfort and safety than 777. I am glad that boeing is failing. They deserve it...

[EstorilEm]

The key to Airbus' success is that they consistently deliver on their EIS dates (well, at least not TOO far off) and more importantly, they meet or exceed their specs, while often bumping up specs later on during testing, or offering packages to airlines to further boost performance, range, etc. This is especially true of MTOW expectations.

Also, their FBW architecture allows them to supply incremental changes to all of their types, without taking them out of service or requiring expensive hardware changes. MCAS / MAX is a perfect example - IF the engine/thrust and nose-up issue had been on an A320 (not that it would, as even the new high-bypass engines of the NEO are placed optimally) ALL airbus would have to do is re-write some FBW behavior software and that's it. All the hardware is (and always has been) already triple-redundant, unlike the initial MAX which had a SINGLE-point failure mode (major no-no in aviation!)

I also have to point out that the 350-1000 and the 787-10 don't compete directly, hence the price difference. The 787-10 is Boeing's least popular variant and they've only sold 60 types. The "much more expensive" 350-1000 has nearly the same number of orders. The 350-1000 has ~30% greater range. A lot of this comes down to aircraft empty weight, and Boeing really didn't do so hot with the 787 (sure, it's composite and everything - but it's almost a pig compared to the A350s). For mid-range routes the 350-900 is SIGNIFICANTLY more efficient than the 787-9 carrying the same payload. Beyond mid-ranges, the 787 cannot retain full fuel weight without exceeding MTOW, and must start to remove passengers or cargo.

From a passenger perspective, the 350 seems to be in a different world than the 787. This is also true of the 330 vs. 777, and certainly 380 vs. 747. They're consistently (much) quieter, and have less NVH in the cabin. This isn't just my observation, it seems to be almost universal amongst business travelers with tons of miles.

As for the actual reason of "why airbus recovered so quickly" - I would have certainly mentioned the flexibility they've been able to get out of the 320. The NEO has been great, but the LR has been even better (from a profit-margin perspective) and the XLR?! They only expected to sell a few of those on VERY unique routes, and instead they're selling like hot cakes - minimal modification and certification versus base NEO, just pure profit margin. Airlines don't have an option, especially those on TATL routes retiring planes like the 757 - Airbus can charge whatever they want. Airbus is also opening up new (domestic!) plants and bumping up production rates beyond what market experts thought was possible to get rid of backlog ASAP. Meanwhile Boeing is cleaning up their parking lots of MAX's and working on modifying them, and actually CLOSING plants. By the end of the year, Airbus should have a MASSIVE delivery advantage on paper.

Everything above has forced Boeing's hand on a 797 / narrow body replacement. With Boeing's recent failures to deliver on time/budget (777X, KC-46, Starliner, etc) many will opt for the 320, as it retains commonality, training, and maintenance with good performance and is low-risk. I fully expect Airbus to counter with a larger all-new composite wing for the 320 family. That might be all they need to do, and it'll still enter service before the 797.

[aceeeed]

No mention of the A220? That bargain acquisition has been a boon to Airbus.

[krozareq]

Airbus getting the CSeries was a masterstroke on their part. The A220 fills a big growing market with the ultra low cost carriers that want something larger than a typical ERJ or CRJ but smaller than a medium haul like the 737MAX or A320neo. Boeing hasn't filled that narrow body market since they rebranded the DC-9 to the 717, which was popular among US low cost carriers. I think Boeing will do pretty well with the new 777X with transoceanic carriers but they need to bring in new cutting edge airframes into the much larger market.

My hypothesis is that once air travel begins to return to normal, the growing market ultra low cost carriers (esp in Europe)will be amassing an influx of capital from selling seats and investor optimism. Instead of the typical strategy of newer low cost operators purchasing aging planes from larger carriers, they'll want to invest in new airframes for the fuel efficiency, lower maintenance costs, longevity of the aircraft, and better passenger satisfaction. Even the big carriers can see a need and there's no doubt in my mind that Airbus will be maxed out in production between the two plants producing them.

[LeZturbo]

I think we couldn’t compare 787 and 350. There are not the same size. 787 and 330-neo or 777-X and 350 comparaisons are more accurate. Just my 2 cents.
Anyway, love your videos !

[DouglasDanielMOT]

Well done. The biggest reason, in my opinion, that AirBus beat Boeing is Boeing's mismanagement. I think that it dates all the way back to when Boeing decided to move its HQ to Chicago. That was done more for appearances than profit. Boeing's managers for decades have been from the finance and not engineering or marketing. So their focus was on price per share and cost control and not on technology or excellence. The horrible mismanagement of the 787 is a case in point. The development was many years behind schedule. Management was focusing on cost reduction by outsourcing all over the world. Had they had an engineering management background or even been willing to listen to experienced engineering managers, they would have realized the substantial risk to schedule, cost and quality that decision imposed on the program.

[abc]

Elon Musk pointed it out : Elon Musk says too many M.B.A.s. are polluting companies' ability to think creatively and give customers what they really want. ... “I think there might be too many M.B.A.s running companies, ” the Tesla Inc. chief executive said. “There's the M.B.A.-ization of America, which I think is maybe not that great.9 dec. 2020

[auchusreferencevideos]

The algorithm brought me here. Watching a few more videos of yours then probably subbing! Great stuff!

[thebookwasbetter]

3:54 - Fun fact - there are not flights over Tibet since the mountains give off wicked turbulence and of course there's no where to land in an emergency. I learned this from another video I watched because I was bored during the lockdown.

[sedrakpc]

Dreamliner was my last plane in Boeing, and boy, oh boy saying that we were in a hurry is just saying nothing. I do not even remember how many deadlines we missed. "Our heads were on fire and asses was catchin." We manage to put explosive batteries on 787 way before it became mainstream on Samsungs, boosted and Teslas 🤣

[Sacto]

Well, it does help that Airbus is selling a huge number of A321neo, A321LR and A321XLR models, which will be replacing many rapidly aging 757-200's and many older 767's. I think Delta is seriously considering a *HUGE* A321neo or A321LR buy of 100 planes to get all the 757-200's off the property.

[paxdriver]

The real reason - duopolies are inherently unstable because of this type of seesaw relationship they cause during a crisis.

[adamwnt]

So boeing seems to mirror the US car industry, while airbus the European one

[gameboy]

there was the one recall of the rolls royce engines for the a380 when it was younger, but i cant think of any other bad news regarding the a380 other than carriers didnt want to fly them due to high costs.