Airbus is not much competition for Boeing (BA). The new Dreamliners and 747-8 are flying off the shelves. Airbus cannot sell a A-380 super-jumbo to save its life. The company’s parent reported poor earnings and said the current year would be cash-flow negative.
But, what would a great company like Boeing be without competition. It could take Airbus some time to get back on its feet. Its new planes seem to be good on paper. It just needs to build them on time.
With Airbus on the ropes, the Chinese are going to step in. They don’t want Boeing to have it too easy. China is already building a mid-sized regional jet, the ARJ-21. The China Aviation Industry Corporation I says that it can begin making large aircraft by 2020. Since the Chinese are expected to buy over 2,000 aircraft between now and 2025, that is pretty bad news.
Even if the Chinese cannot find customers outside their own borders (boarders) the new initiative may make economic sense based on the country’s need for new airplanes.
Since Airbus is the weaker of the two large commercial air frame companies, the news may be worse for it. But, there is no partying at Boeing headquarters tonight.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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