Question

Boeing’s strategy appears to focus on its 787 mid-to-large size plane and its ability to fly into smaller, non-hub airports. Rival European Airbus’s strategy appears to focus on its very large A380 plane. What assumption about future demand for air travel is each company making?

Answer 1

Boeing is using comparatively smaller planes and focusing on working with smaller airports. This indicates that they expect the number of smaller airports increasing. This also indicates that Boeing expects number of routes to increase between different location and population to spread consistently across all geographies. This is why they expect the number of smaller hubs will grow, it will spur the airlines to begin flying on a new route and thus Boeing’s 787 will be helpful.

Airbus on the other hand is betting on larger aircrafts. This means they expect the existing and established airports to grow larger and be the key ports of flight between two locations. They expect and assume that the flow of traffic on these established routes will increase at a much larger rate than the growth of smaller airports. Hence they are betting on the existing airports to continue doing well and faced increased flow of passengers.