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Airbus Reaches 50 Percent Market Share
Airbus has reached its goal of a 50% market share, says Gerard Blanc, evp for operations. “We are not looking for dominance, we are not looking for market share, we are not looking for Boeing to shrink,” he says, noting that if either competitor’s share stays substantially below 50%, their fixed costs will be the same and they will be less competitive. “And we have 220 customers, and they do not want to see a monopoly. They want competitive suppliers.”
The company’s goal today is excellence, Blanc says. “Excellence vis-à-vis our customers, in support and reliability. Excellence for our shareholders, with double-digit returns. Excellence for our staff — a happy staff. Non-stop innovation for the benefit of our customers.” And if, in the course of pursuing those goals, Airbus’ market share winds up above 50% for a time, “that happens.”
Chief commercial officer John Leahy backs up Blanc’s statement: With a 50% market share “we plan to lose half of our campaigns, and we took the liberty of losing almost all the campaigns in the first half of the year. But we’ll come back.” And, Leahy adds, Airbus projects an average of 866 aircraft sold per year in the 100-seat-plus bracket for the next 20 years, a total of $1.9 trillion dollars worth of aircraft — “in an industry with very high barriers to entry.” Both aircraft manufacturers, Leahy says, “have one of the best stories that Wall Street has heard in years.”
Airbus still believes that the very large aircraft category — the A380 and 747 — will account for 10% of aircraft sales — 86 a year — and 22% of deliveries. “The 747 sold 1,300 units over its lifetime, in a much smaller industry,” says Leahy. “We probably will share that market with a competitor.” —Bill Sweetman
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