Teal: Airbus and Boeing are locked in a ‘vicious war’ for market share

Paris Air Show » 2005
December 15, 2006, 1:13 PM

Airbus and Boeing are making too many commercial jetliners in a “vicious war” for market share that will continue until the end of the decade, predict analysts at consultancy Teal Group in its new 2005-14 commercial-jetliner forecast. “Across the board, we are in a persistent oversupply situation,” it said in a forecast released today.

According to Teal lead analyst Richard Aboulafia, the fight for a majority market share will “stay neck-in-neck” until 2009, at which point the new Boeing 787 will enter service–albeit after a year’s delay to current schedules. He has concluded that the 767-replacement design has brought Boeing “clearly back into the game,” with a consequent boost to customer confidence helped by the weak U.S. dollar.

Damning the design with faint praise as “not a bad compromise,” Aboulafia characterizes the soon-to-be-launched Airbus A350 as a response to the 787 rather than as a product aimed at meeting similar market requirements. Nevertheless, he rates the A350 as also being an effective competitor against Boeing’s 777-200ER.

Teal’s forecast, which covers production not orders, takes no account of “a new 747-400 Advanced” and even considers the A380 very large airliner as “much less relevant” to its consideration of upcoming production of commercial jetliners with 100+ seats. However, the forecast does accommodate new composites-construction single-aisle aircraft from both manufacturers.

Teal analysts expect just over 7,250 such aircraft worth nearly $473 billion to be built in the period (see table). This compares with a little over 6,500 such aircraft valued at $415 billion produced in the past 10 years. The forecast assumes 72 percent of the new aircraft will be single-aisle machines accounting for 44 percent of the overall value.

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