Airbus cuts costs even as it expects plane demand to increase

The manufacturer is in an awkward business spot at the moment

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A partially constructed Airbus plane
A partially constructed Airbus plane
Photo: Markus Scholz/picture-alliance/dpa (AP)
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Airbus is caught in an awkward place between its short-term and long-term futures. The French planemaker is taking immediate steps to quell costs, but is also poised to benefit from missteps made by its main competitor, Boeing.

Reuters reports that the company expects that the number of airplanes flying around the world will double over the next 20 years. Its latest guess is that there will be just over 48,000 jets in the skies, up slightly from the estimate it made the year before. Since Airbus and Boeing are two halves of a global duopoly in the commercial airliner production business, it stands to benefit heavily from that growth.

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On the other hand, Reuters also reported recently that Airbus is cutting costs and instituting a hiring freeze in order to prop up profit margins this year. Even though it’s perfectly positioned to take up the slack left by Boeing’s reduced capacity following a mid-air door plug blowout earlier this year, Airbus told investors last month that it is lowering its earnings guidance for the rest of 2024 because it has been running into supply chain problems that have hampered the building of new planes.

Whether Airbus’s stop-and-go holding pattern will leave room for another planemaking competitor to step up and grab some market share remains to be seen. Brazil’s Embraer, which specializes in smaller planes than the ones that airlines make big fleet orders for, has been rumored to be building larger planes that would compete with Boeing and Airbus, but it hasn’t confirmed any such plans yet.