Airbus finds itself in a challenging position between its immediate and long-term prospects. The French aircraft manufacturer is implementing measures to reduce costs in the short term, while also standing to gain from its primary rival, Boeing’s, recent issues.
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According to Reuters, the number of airplanes in operation worldwide is expected to double over the next two decades. Airbus forecasts that there will be over 48,000 jets in service, an increase from its previous estimates. With Airbus and Boeing dominating the commercial airliner production market, Airbus is likely to benefit significantly from this growth.
Conversely, Reuters has also reported that Airbus is enacting cost-cutting measures and a hiring freeze to maintain profit margins for the year. Despite being well-positioned to fill the gap left by Boeing after a mid-air door plug incident earlier this year, Airbus informed investors that it is lowering its earnings forecast for the rest of 2024 due to supply chain challenges affecting new plane production.
The question remains whether Airbus’s cautious approach will allow another competitor to enter the market. Brazil’s Embraer, known for its smaller aircraft, has been rumored to be developing larger planes to compete with Airbus and Boeing, although it has not confirmed these plans.