European aerospace company Airbus won a major order of 100-aircraft over its rival Boeing, a sign that the company's 737 MAX 8 crisis might be creating a broader reputational problem for the company going forward.
Boeing's 737 MAX 8 Nightmare is Money On Airbus' Balance Sheet
Bloomberg is reporting that European aerospace firm Airbus has won a major, 100-aircraft order valued at $11 billion according to the list prices of the models ordered, beating out arch-rival Boeing which is still struggling to get it's embattled 737 MAX 8 back into service following its worldwide grounding in March of this year.
Airbus announced the deal today during the Paris Air Show, revealing that Air Lease Corp., the company that pioneered aircraft leasing and one of the largest aircraft customers in the world, has ordered 27 of its latest extended-range aircraft, the A321XLR, as well as 23 A321neos and 50 A220 jetliners, acquired in a 2017 deal with Bombardier. The A321XLR is a variant of Airbus' A320neos aircraft, Airbus' new fuel-efficient model that was the catalyst for Boeing to try to keep pace with Airbus by altering the design and production of their standard 737s to create the 737 MAX 8, a decision that would ultimately cost the lives of 346 people in two separate crashes.
The design changes to the baseline 737 model are at the root of Boeing's current 737 MAX 8 crisis, altering the aerodynamics of the wings of the aircraft, which Boeing tried to patch with a software system called MCAS instead of a more fundamental design solution. A cascading series of issues would eventually result in the apparent catastrophic-malfunction of the MCAS autopilot system that is widely believed to be the inciting event that led to the crashes of two 737 MAX 8 airplane crashes in less than six months. The global grounding of the then-most popular plane in the world followed soon after the crash of Ethiopian Airlines flight 302, a grounding that has severely tarnished the reputation of one the world's premiere companies.
The creeping doubts about the safety of Boeing aircraft certainly haven't been helped by the extensive reporting in the aftermath of the 737 MAX 8 groundings that revealed how much of the complicated technical and safety oversight of Boeing's aircraft wasn't being performed by regulators at all, but was instead being performed by Boeing itself, with regulators signing off on the erroneous safety reports being produced by the company.
Airbus has been muted in their response to Boeing's struggles and has not openly criticized its rival for its apparent failures. It was inevitable though that the second half of the Boeing-Airbus aerospace duopoly would begin to see increased orders for its aircraft, in response to the prolonged grounding of Boeing's 737 MAX 8. As today's news demonstrates, the short-term gain from rushing a product to market may come with larger, unpredictable tail risks that end up wiping out all those gains and much, much more in only a matter of weeks, not to mention the irreparable, long-term damage to a once-sterling reputation.