Erratic Airbus Behavior Fuels Its Flat Spin

Just last week Airbus bought the Bombardier C series for a Canadian Buck. On the surface it seemed like made a Boeing 737 backdoor stopper but it also caused disarray in Toulouse. Its ill selling A-319 has a plan B and its a Bombardier's C series take-over.



Disarray is a symptom of a faltering leadership paradigm at Airbus. Top end program manager types at Airbus wonder what's next. John Leahy, the Airbus sales wizard, is leaving without an announced replacement in sight. Leahy is busy picking out the color of his Airbus retirement parachute and not coping with a C Series invasion. Optimistically, Airbus positions its customers with broad and expansive statements. There is a 6,000 unit market for the 100-150 seat where Airbus says it will get 50% of that market. 

Boeing is taking a "what the huh" position and wonders where those sales will come from after that statement. Its own 150 seat 737-Max 7 and it has tepid sales at this time and the 100 seat market is a special interurban footprint in most markets. Embraer will continue its wedged in position with its 75-130 seat configuration. Airbus has some dogged issues with the A-319, no orders since 2012, even with the NEO stamp on its side. The question becomes how can Airbus be so dismissive of the C series in 2016 and then turn around and buy the company in 2017? Unless it knows something no one else knows about its own airplane program strategy. This last statement is shadowed by the Airbus disarray at home.

Bombardier is taking a "what the eh" position as it feels relieved Airbus will now take responsibility for the C Series introduction into the market place. When Boeing knows it can sell 10,000 narrow bodies in 20 years, Bombardier thinks it can sell 2,000 narrower bodies in 20 years, while Embraer will do the same or more in that segment of the market. 

If Boeing's single aisle bottom eventually becomes the 737 Max 8 it means the Max 7 is no longer making Boeing money. It too will go the way of the 300-400-500 and so forth. Bombardier can have the very thin 737 Max 7 market slot of about 30 units a year delivered. The flexibility of the Max 8 can dip down to hauling 130 passengers on each flight easily and it can expand its passenger traffic upward to 180 seats. 

The C series can't do that even if it could hold 150 passengers. Airbus is in disarray making this decision unless it has a grander scheme in mind. This is definitely a grasping at straws move going forward and Bombardier got caught up in the Airbus grandeur scheme.