Ugly As The 737 MAX Situation Is, Boeing Is Insulated By Airlines' Fear Of Missing Out

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Ugly As The 737 MAX Situation Is, Boeing Is Insulated By Airlines' Fear Of Missing Out
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Airbus is unlikely to win any long-term market share due to the Lion Air and Ethiopian 737 MAX tragedies because the penalties are huge for Boeing customers in switching to the only other alternative supplier.

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Yet the jetliner industry is a duopoly with very high barriers to entry, so nobody is entering the world market in a serious way in the next decade, at least. And the nature of the next-generation single aisle battle, now under way, likely precludes any serious shift in current and even future orders.

These are early days in both production programs, but orders are another story. Boeing has delivered 376 MAXs, with another 4,636 unfilled orders. Airbus has delivered 687 A320neo series jets, with another 5,814 unfilled orders. In general, Airbus enjoys a big lead at the top end of the product range with its A321neo, while Boeing enjoys a modest lead in the middle of the range with the 737 MAX 8.

Due to supply chain constraints, particularly with the new engines, building this new generation of single aisles has been a serious challenge for the two primes. Last year, the third year of A320neo production, Airbus delivered just 386 neo series jets, plus another 240 older A320ceo series jets. Boeing, in its second year of MAX production, delivered 256 MAXs plus 324 older 737NGs. Both are working hard to get to higher rates this year, with Airbus shooting for 60 per month and Boeing for 57.

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