Airbus and Boeing struggle to adapt to shrinking aircraft market

Photo credit: Wikimedia Commons

The good times couldn’t last forever. As airlines retire and park aircraft, and delay orders for new planes, the world’s top commercial aircraft manufacturers face years of reduced market demand. Downsizing has begun.

Boeing’s order book shrank this year by 381 airplanes as the number of cancelations outpaced new orders through September. Airbus is doing better, gaining 300 net new orders after accounting for 70 cancelations. That gave Airbus a backlog of 7,441 aircraft, far more than Boeing’s 5,146. Airbus delivered 341 commercial aircraft through September versus just 98 for the U.S.-based aviation giant.

Earlier this month, Boeing released its annual market outlook, grimly projecting a decade of reduced demand for commercial aircraft, cutting its 2019 forecast by 11%.

Both major aircraft manufacturers are making cuts to adapt to a shrinking market. Boeing plans to downsize to 130,000 workers by the end of 2021, having started this year with 160,000.

In an Oct. 28 letter to employees, the company’s CEO Dave Calhoun said, “Since the start of the pandemic earlier this year, we have raised liquidity, reduced spending, simplified reporting structures, and dramatically lowered commercial production rates.”


The company also announced that it would end production of of its 787 Dreamliner in Everett, Wash., consolidating production of the aircraft at its assembly plant in South Carolina.

Calhoun added, “As we align to market realities, our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our company.”

The bright spot for Boeing is that the troubled 737 MAX may be certified to return to service by the end of this year, enabling the company to restart deliveries of some 400 aircraft that were halted last year.

Photo credit: Airbus

Airbus reached an agreement with its unions to eliminate 4,200 jobs in France, part of an overall plan to reduce its workforce by 15,000. Some of those layoffs could be avoided if Airbus reaches agreements with the French government.

“After nine months of 2020 we now see the progress made on adapting our business to the new COVID-19 market environment,” said Airbus CEO Guillaume Faury. “Despite the slower air travel recovery than anticipated, we converged commercial aircraft production and deliveries in the third quarter and we stopped cash consumption in line with our ambition.”

Many airlines have canceled or postponed orders for new aircraft, including Delta, United, Norwegian, British Airways, Lufthansa, Japan’s ANA, and Emirates.

Longer term, Boeing sees demand for air travel and new aircraft returning strongly over a 20-year timeframe.

Each week, Sustainable Transportation publishes news and analysis of the upheaval in travel and transportation due to the COVID-19 pandemic, written by transportation and environmental journalist Dan Zukowski. Please subscribe and stay informed.