Boeing and Airbus Dogfight
Boeing and Airbus have gone toe-to-toe at the Paris Air Show. As the only two rivals controlling 99% of the jetliner market, both stocks are on the move.
The two companies have held a duopoly over the commercial plane trade for a long time. Owing to their shared dominance, Boeing and Airbus are seen as defensive shelters by investors. Nowadays, the pair jostle over plane orders from airlines around the world, each aiming to offer a better jumbo than the other. After years of development, Boeing took one such jumbo to the skies called the 737 MAX. No investor could have predicted events since.
Two faulty 737 MAX planes. Two crashes. Two tragedies. The harshest of spotlights fell on Boeing, now watching orders for its 737 MAX be canceled left, right, and center. In an uncharacteristic lapse of safety standards, the aerospace firm lost trust. The new plane remains grounded today, as executives turn their attention to the Paris Air Show. This is a venue for putting pen to paper on as many commercial plane orders as possible. On Monday, Airbus capitalized on the slip from Boeing, pipping it to the post with 100 plane orders. One-nil Airbus.
However, Boeing has just turned the tables. The company has gone one better than Airbus with a 200-plane order for none-other than the 737 MAX. The buyers, IAG, have thrown Boeing investors a lifeline of restored confidence. Pushing on from here, can Boeing shares rekindle the momentum they enjoyed before the disasters? Sales expectations going into Paris were low, but both companies have stormed out of the gates. Look out!
