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Airbus Fires the First Shot in the New A320/737 War with Boeing - part 1 of 4

Airbus reluctantly initiates a very high stakes game

An illustration of the new Airbus A320neo (in Air New Zealand livery).

Part 1 of a series on the needed evolution of the Airbus/Boeing A320/737 aircraft. Click the links at the bottom to read through the other three articles in the series.



Sometimes something is so good you don't want to change it, for fear of upsetting things.

That has definitely been the case for Airbus and Boeing with their A320 and 737 families of planes.  A lazy duopoly between the two companies has resulted in their most strategically important planes also being their most overlooked planes.

But all that is - at last - about to change.  Please read through this four part series for a fascinating look at what hasn't happened and why, and what must now happen, and why.

Airbus and Boeing find themselves in a highest possible stakes quandary at present.  Forget Boeing's mess with the 787 (and less discussed but also messy, the 747-8) and forget Airbus’ problems with the A380 and its far from completed A350.

The key to both company's future success rests not on these futuristic planes, but on their ‘bread and butter’ workhorse 737 and A320 families.  Let’s first understand the vital importance of these planes to the two manufacturers, then look at the present problems associated with them, then at the options open for the future.

The Importance of the 737/A320

These two families of planes outsell, by a huge margin, all the other planes made by Airbus and Boeing.

The starkest indication of the vital importance of these planes to Airbus and Boeing is to look at the actual sales numbers.

New Orders in 2010

So far this year (through mid December), Airbus has taken net new orders for 294 A320 series planes.  All other airplane types (A330, A340, A380 and A350) represented only 160 orders.

Boeing has reported 447 net new orders for its 737 family, and a mere 46 orders for all its other airplane types (747, 767, 777 and 787).

Planes Delivered in 2010

If you prefer to look at deliveries, Airbus has delivered 360 of its A320 family and 101 other planes so far this year.

Boeing has delivered 343 of the 737 family and 77 other planes.

While the A320 and 737 are the least expensive of the range of planes offered by both Boeing and Airbus, it should be abundantly clear that they are also the hugely largest part of both company’s manufacturing programs.

Further, airlines sometimes like to stick to a given family of airplanes, so selling an airline on one type of plane helps sell them on other types of planes.  And because of the ongoing contact a manufacturer has with an airline once it gets any type of plane into the fleet and can deal with the airline as a customer rather than an arm's length prospect, success with one type of plane often helps the manufacturer to sell its other planes to an airline too.

The easiest plane to sell any airline is the least expensive plane - the A320/737.  Getting sales of this plane to a new airline customer gives the successful manufacturer a strategic advantage into the future.

The Growing Problems with the A320 and 737

Both planes are the oldest series of planes offered by either manufacturer.

The 737 is much older than the A320.  The 737 first flew in 1967, and embodied much from the earlier 707 design dating back to the mid 1950s.

The first A320 took to the skies in 1988.

Both planes have evolved over time (particularly the longer lived 737) and are very different to the first models of each, but their underlying design is still fundamentally the same.

The two planes have uneasily co-existed in the market for over twenty years now, and it is hard to say with any authority which is the better plane.  The A320 is a little wider, giving a barely perceptible (but still welcome) increase in width to each passenger, but the 737 might be slightly more fuel efficient.  Some airlines have become enthusiastic evangelists for one series of plane, and others are equally convinced the other is by far the better.

Everyone has been sort of happy with the current planes.  From the point of view of Boeing and Airbus, the families of plane are currently comfortably matched – both companies can look upon their series of planes as being, at worst, ‘competitive’ with the other company’s alternate series, and at best, being somewhat superior.  And, no matter whether competitive or superior, the planes are massively profitable for both companies, and present with no engineering problems or challenges, and are well understood (and well loved) in the marketplace.  Neither company could exist without the foundation of sales, manufacturing, market penetration, and everything else which they enjoy from the A320 and 737 families.

The airlines are becoming slightly less content.  Although preserving the status quo works well for them too, and spares them the need to consider capital-intensive upgrades of their fleet to match competing airlines (if a new better alternative to the 737/A320 were to appear), there is a growing awareness by the airlines that these planes – which are, of course, equally a staple underpinning to their fleets, just as they are to Airbus and Boeing – are no longer state of the art.

Airlines Start to Pressure For Change

The airlines have seen the promise of new efficiencies from new design and construction technologies, and from new engines too.  Having suffered from a very bad year in 2008 when oil prices almost reached $150/barrel before collapsing down to $30, and now seeing oil steadily climbing again at a more sustainable rate, up past the $90/barrel point with no sign of any slowing, the airlines find themselves in a situation similar to what office managers find themselves with photocopiers.

If you’ve ever owned a photocopier, you’ll know that competing companies will call on you from time to time, as well the rep for the company you bought your current copier from.  They’ll offer you a newer better photocopier.  It will have more capabilities, and produce better quality copies faster and more reliably.  And – most important of all – the cost per copy will be reduced, and the salesman will show you how the new copier will pretty much pay for itself due to the saving you’ll make on every copy we run outweighing the amortized capital cost of buying the new copier.

Now think airplanes.  Except, in this case, the airlines are starting to notice that no salesman is calling on them offering them a ‘better’ plane – for example a plane that can carry more passengers, more freight, travel more quickly, go longer distances, and – here’s the big one – cost less per mile to operate.

Just as we can often justify a new photocopier because of the savings in the copies, so too can airlines sometimes justify new planes by savings in their operating costs.  Furthermore, the more that the cost of jet fuel climbs, the quicker such paybacks become, and the more imperative it is for airlines to have the most fuel efficient planes possible.

So the airlines are starting to apply pressure on both manufacturers, asking them to come up with a new replacement to the current airplane families.  They know that new technologies could make for much more efficient planes, and they want these planes.

This is part 1 of a series on the needed evolution of the Airbus/Boeing A320/737 aircraft.  Please see also the other parts of this series :

1.  The vital importance - and growing problems - of the A320 and 737 families of airplanes
2.  Why Airbus and Boeing don't want to - but must - update their aging airplane series
3.  Engine issues and what Airbus and Boeing could do
4.  Boeing's big problems

If you liked this, you might also enjoy our multi-part series 'Where is Boeing Going'.

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Originally published 24 Dec 2010, last update 30 May 2021

You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.



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