Customers
Boeing's mission statement signifies that one of its core competencies lays in "detailed customer knowledge and focus. Customers have the choice of buying new or used planes and to license them or purchase them entirely. The customers for Boeing's commercial division are the airlines of the world, and governments are the customers for the defense division. For the commercial division, carriers in China and India are becoming valuable overseas customers, as income rises in these countries along with a forecasted air traffic growth of 8.8 percent in China through the year 2024, and 25 percent growth yearly in India" Half of the orders for the Boeing 787 Dreamliner are from Asia-Pacific clients. Although it is early in the process, the Airbus A-380 currently has not been purchased by any American carriers, which may suggest that Boeing will dominate the superjumbo aircraft market within the United States. Australia's carrier, Qantas, has indicated it will purchase 115 of its 787 Dreamliners valued at more than $14 billion. United Airlines has traditionally been Boeing's largest domestic customer, and low-cost airlines have also been key clients for Boeing. However, successful sales campaigns by Airbus resulted in some lost sales for Boeing with the low-cost airlines. JetBlue, when it first emerged in the low-cost industry, announced its decision to purchase Airbus's A-320 over Boeing's 737. JetBlue liked the wider seats, more leg room, and more overhead storage that the A-320 could offer its passengers.
Through early 2004, a major problem seemed to lay in the fact that Boeing had a weak sales force and Airbus was consistently pricing its products below Boeing's prices. These factors, coupled with superior technology in the A-320, won Airbus a considerable amount of Boeing's previous contracts. Boeing's list of lost deals was getting longer and longer, with notable losses to Airbus from United Airlines, AirBerlin, Air Asia, and Southwest. The situation became extremely alarming to Boeing, and in the latter half of 2004 and the beginning of 2005, numerous changes were made in Boeing's sales force. Senior executives and board members were sent into the field to garner sales, decision making was sped up, and the salespeople were empowered to take more risks in pricing.
Frustration with the two-year delay in delivery of the Airbus A-380 (as discussed later in the case) allowed Boeing to acquire some valuable customers from Airbus, including FedEx. FedEx is experiencing growing demand for international freight shipments and needs more planes in its fleet sooner than Airbus can deliver, which resulted in a $2.3 billion loss for Airbus and a $3.6 billion gain for Boeing in new orders." Virgin, also frustrated with the Airbus delays, canceled its order for the A-380 and partnered with Boeing, ordering 15 of its 787s.
In addition to the battle for sales, Boeing and Airbus have been engaged in an ongoing dispute concerning the role that governments play in the success of the two companies.