The aviation industry is currently facing a confluence of challenges, including safety concerns, supply chain disruptions, and geopolitical pressures. The recent Air India Boeing 787 crash, which resulted in the deaths of 242 passengers, has deepened the crisis for Boeing, while Airbus has capitalized on the situation by securing significant orders.
The Air India crash has intensified scrutiny on Boeing's quality control and safety standards. This unfortunate accident, the most serious in Boeing's recent history, has brought the American manufacturer's focus on cost savings and shareholder remuneration over product quality into question. Shares of Boeing have plunged following the crash. The incident has also triggered concerns among passengers, with many questioning the safety of flying on Boeing planes, particularly the 787 model.
Boeing's troubles extend beyond the Air India crash. The company has been grappling with ongoing production caps imposed by the FAA, a substantial backlog of over 5000 aircraft, and a series of safety-related incidents that have eroded public trust. Airlines, including Taiwan's China Airlines, are extending leases on existing aircraft due to delays in Boeing's deliveries. These challenges have led Boeing to cut its 20-year delivery forecast.
In contrast, Airbus has been capitalizing on Boeing's struggles. At the 2025 Paris Air Show, Airbus reportedly secured nearly $21 billion in aircraft deals, while Boeing announced no commercial orders. Airbus has also reported a 40% reduction in supply chain disruptions and has increased its 2025 delivery target. Furthermore, Airbus has signaled financial confidence by raising its dividend ceiling. The company forecasts a 3.6% annual growth in passenger traffic, with strong demand coming from regions like the Middle East.
The contrasting fortunes of Boeing and Airbus can be attributed to their differing business philosophies. Boeing's focus on maximizing short-term profits and outsourcing production has led to a decline in quality control and a loss of oversight over its own aircraft. Airbus, on the other hand, has prioritized controlling the quality of its products and has invested in research and development. In 2022, Airbus integrated its factories under Airbus Atlantic and created Airbus Aerostructures in Germany to retain design authority and high-complexity manufacturing in-house.
Despite Boeing's current challenges, analysts point out that the airplane industry is essentially a duopoly. Even with its struggles, Boeing will likely remain in business for the foreseeable future because Airbus alone cannot meet the global demand for aircraft. Boeing still commands significant orders, such as a $96 billion deal with Qatar Airways. However, the company faces immense pressure to restore its reputation for safety, ensure reliable deliveries, and regain the trust of its customers.
Following the Air India crash, Airbus emphasized that safety is paramount and transcends competition. Airbus CCO Christian Scherer stated that the tragedy serves as a reminder of the inherent risks in aviation and the industry's collective responsibility to prevent future accidents. Boeing CEO Kelly Ortberg cancelled his appearance at the Paris Air Show to concentrate on the investigation.
The aviation industry now faces the critical tasks of production recovery and rebuilding customer trust. While Airbus is currently benefiting from sustained demand and a relatively stable outlook, Boeing is under intense pressure to address its quality control issues, streamline its production processes, and restore its reputation as a safe and reliable aircraft manufacturer. The future trajectory of the aviation industry will depend on how effectively these challenges are addressed and whether Boeing can regain its position as a leader in the global market.
