Boeing crashes, while Airbus soars in China.

China is the world's second largest market for passenger aircraft, and China itself hopes to be a world-class producer of planes by 2035.

In the meantime, Boeing and Airbus are battling for orders. Boeing was the dominant supplier to the Chinese market up to 2019. Since then, Airbus is clearly favored by Chinese airlines, capturing more than half of new orders.

Part of the reason for this is geopolitical, with increased tensions between China and US-based Boeing. But the bigger problem is Boeing's management philosophy to deliver planes to buyers in China, while Airbus builds them here. Airbus has quadrupled the number of planes that can be built and delivered to Chinese airlines, from Final Assembly Lines inside China.

That is the crucial difference, and one that will damage Boeing for years. Airbus will enjoy access to China's deep supply chains, and even if Airbus struggles against the eventual Chinese makers of planes, Airbus will still have export markets for their aircraft built in China at a lower cost than Boeing. In this respect, Airbus in 10 years may look like Volkswagen today: fighting for market share in China, but with a robust factory presence in China that will export to foreign markets at lower cost.

Resources and links:

Aviation Week, How did Airbus become dominant in China?
https://aviationweek.com/aerospace/ma...

Reuters, Airbus opens second China assembly line
https://www.reuters.com/business/aero...

German government wants companies to 'de-risk' from China, but business is reluctant
https://www.npr.org/2024/01/19/122007...

New York Times, Volkswagen is shifting more operations to China, tapping the country’s electric vehicle capacity and building factories
https://www.nytimes.com/2023/12/12/bu...

Thumbnail photo, Airbus’s Chinese Assembly Line Delivers its First A321NEO
https://www.ainonline.com/aviation-ne...