Wong Maye-e  /  AP
Analysts suggest that the A320’s popularity has less to do with technical superiority than aggressive pricing, though the plane does have a few physical advantages over its Boeing rival.
updated 2/26/2006 6:48:28 PM ET 2006-02-26T23:48:28

Boeing’s 737 passenger plane, which has seen deliveries top 5,000 since it entered service 38 years ago, has always been touted by its U.S. makers as the world’s most popular commercial jet.

But lately, the plane has been losing business to European rival Airbus’ A320, the 737’s direct competitor in terms of size, range and listed price. Both single-aisle planes are designed to fly a short-to-medium range and seat a maximum of about 200.

Last year, Toulouse, France-based Airbus had a 62 percent market share of the single-aisle plane market with 918 orders for the A320. The 737 had 569 orders.

This past week at the Asian Aerospace show, the A320 again outshone the 737 in orders.

  • Indonesian low-cost carrier Adam Air said it planned to replace its fleet of Boeing 737s over the next five years with 30 leased and purchased A320s.
  • Indian budget carrier Go Air placed a firm order for 10 A320s and took an option to buy 10 more.
  • Airbus finalized a deal on the eve of the air show to sell 43 A320 and A319 jets to state-owned domestic carrier, Indian.

Boeing’s only major deal this week came when Indian budget carrier Spicejet ordered 10 737 planes and took an option to order another 10.

Are the 737’s days of glory over?

Few experts think so. After all, last year’s 569 orders for the jet was an annual record high.

Analysts suggest that the A320’s popularity has less to do with technical superiority than aggressive pricing, though the plane does have a few physical advantages over its Boeing rival.

For one, the Airbus jet’s cabin is seven inches wider than the 737.

Airbus’ customers agree that’s one influencing factor, together with the plane’s potential to lower operating costs, as the company claims.

“We are sure that Adam Air passengers will be excited by the A320’s attractive cabin and delighted by the low fares we will be able to offer,” said Adam Adhitya Suherman, president-director of Indonesian carrier.

“With the 737, even though they’ve upgraded the length, the avionics, and the wings, the cross-section of the plane remains the same as it was forty years ago,” said Andrew Miller, chief executive of the Center for Asia Pacific Aviation, a consultancy based in Sydney.

Miller said the popularity of the A320, introduced in 1988, had much to do with its growing use by low-cost carriers.

“That’s where all the growth has been. Now there’s an acceptance of the A320 as a low-cost workhorse, whereas prior to that the 737 was the plane of choice,” Miller said.

Miller also said the A320 was slightly more fuel efficient than the 737 — by less than 5 percent.

Shukor Yusof, an aviation analyst with Standard & Poor’s in Singapore, suggested that Airbus had lowered its prices to clinch many of the recent A320 orders.

“What Airbus has done very successfully is to go beyond a certain pricing threshold, which makes their products more attractive to potential customers, especially low-cost carriers,” Yusof said.

But Yusof said the 737 remains “a hugely popular plane” that is facing stiff competition from Airbus. “The A320 added a new dimension to a market that was previously dominated by Boeing,” he said.

Both the A320 and 737 have a list price of around $60-70 million, less than a third of the average list price for their widebody siblings, the A340 and the 777, but plane makers often give airlines discounts. The actual prices of deals are rarely revealed.

Airbus spokeswoman Barbara Kracht said airlines chose the A320 on the merits of the plane.

“It really is a leader in all categories, whether it’s established carriers or low cost ones,” Kracht said.

But while Airbus may be having success with narrow-body jets, it has expressed concern that it is losing ground in the wide-body, long-range market for jets like the 777 and A340, which generate higher profits.

Last year, Chicago-based Boeing sold 455 of these larger planes, representing 44 percent of its orders, while Airbus sold 193 — just 17 percent of its total.

And when it comes to the 737, Boeing says demand remains strong.

“We just delivered our 5,000th 737 earlier this year and we had our 6,000th order back in December, total. So it’s the most successful airplane in history,” Boeing spokesman Jim Schlueter said.

“Airlines continue to buy the 737 because of all the great features it has, its reliability, its maintainability, its low operating cost gives high value to customers,” he said.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%