Boeing vs. Airbus: Not an Easy Decision for Airlines

May 4, 2018

For airlines, the single biggest purchase they'll make are the planes themselves. PBN editor-in-chief A. Kam Napier has more on how Hawaiian and Alaska Airlines approached their choices.

If you need an airliner, you really only have two choices, as far as manufacturers. There's Boeing, based in the United States, and Airbus, based in Europe but with manufacturing facilities in the U.S.

Two airlines with a big presence in the islands have recently been going through the process of acquiring aircraft and PBN wondered what goes into a business deal of this kind. Hawaiian Airlines made a big switch, canceling an order with Airbus to go with Boeing instead. Hawaiian's CEO, Peter Ingram, says, "One of the challenges is you're buying an asset that is going to last 25 to 30 years."

The airline felt that in the long run, the more popular Boeing 787-9 Dreamliner model would have a higher residual value than the Airbus A330neos. Hawaiian is acquiring 10 Dreamliners for $2.82 billion, the first of which will arrive in 2019.

Boeing 787-9 Dreamliner
Credit José A. / Flickr

Alaska Airlines decided to go for an all-Boeing fleet in 2005, a process that took until 2010 to complete. For that airline, cost was a factor. As with many purchases, the more you buy, the better deal you can negotiate. By keeping the cost of its planes down, Alaska had more room to then keep fares down, allowing them to be more flexible and competitive on ticket prices in the market.