Last weekend, Boeing (NYSE:BA) formally launched its new 777X widebody at the Dubai Airshow. Even though the plane isn't expected to be ready until 2020, Boeing has already racked up 259 orders worth more than $95 billion at list prices. Most notably, Emirates -- which is now the world's biggest international airline -- placed a record-setting order for 150 of the new jets!

Boeing

The 777X is Boeing's new weapon for disrupting the jumbo-jet market (Photo: Boeing)

The 777X will allow Boeing to maintain its dominance in the widebody aircraft market for the foreseeable future. Between the 787 family and the new 777X family, Boeing now offers highly efficient long-range widebody aircraft that can meet almost any size requirements. Moreover, I don't think Airbus has any good response available.

The decline of the jumbo-jet

For a long time, the market for widebodies capable of long-haul flights was divided between smaller twin-engine jets and large three-to-four-engine planes like the Boeing 747 and MD-11. However, as engines have become more powerful and more reliable, twin-engine designs have taken over more and more of the market.

The original Boeing 777, which entered service almost two decades ago, began that process, as it was close in size to early 747 variants. The 747 has grown in size in order to avoid competing with the 777, while Airbus has more recently introduced the massive A380 "super-jumbo."

However, the super-jumbo segment is a niche market, as most airlines do not fly many routes that can support airplanes of that size. Indeed, while the Airbus A380 entered service six years ago, through the end of October Airbus had just 259 total firm orders . That's the exact same number of orders that Boeing announced for the 777X this weekend alone! (Airbus did receive another 50 A380 orders from Emirates this week, so it is still ahead for now .)

A whole new ballgame

The one factor that keeps four-engine jumbo jets like the 747 and A380 flying is that their higher seating capacities have given them a unit cost advantage. However, a four-engine airplane will invariably burn more fuel per seat than a large twin-engine plane. With the rapid increase in jet fuel prices over the last 10 years, this fuel "penalty" has shrunk the jumbo-jet cost advantage.

US Gulf Coast Kerosene-Type Jet Fuel Spot Price Chart

US Gulf Coast Kerosene-Type Jet Fuel Spot Price, data by YCharts

With the 777X, improvements in engine technology and wing design are boosting fuel efficiency even further. At the same time, the larger model (the 777-9X) is significantly bigger than the 777-300 (Boeing's largest twin-engine plane today), or the A350-1000 that Airbus is currently developing. As a result, the 777-9X will have the lowest unit cost of any commercial airplane .

If the 777-9X really does deliver unit costs below the 747 and A380, it will rapidly cannibalize demand for both jumbo jets. Aside from a few special cases, there is no reason for an airline to operate a larger airplane unless it offers a lower unit cost. Otherwise, reducing the number of seats available is a no-brainer, because it boosts unit revenue, leading to higher margins.

Out in the cold

Airbus has done an admirable job growing in the narrowbody market; its A320 aircraft family has overtaken the Boeing 737 in terms of future orders. However, it has been unable to catch Boeing in the widebody market. Despite a variety of reliability issues, Boeing's 787 Dreamliner just passed the 1,000 order mark , whereas the competing Airbus A350 only had 764 orders as of Oct. 31 .

The launch of the 777X will complete Boeing's domination of the widebody market. Boeing has effectively "covered" the A350's market and then some with its new widebody lineup. At the bottom of the A350 family, Boeing's 787-9 competes directly with the A350-800. The recently introduced 787-10 competes directly with the A350-900. Meanwhile, the new 777-8X competes directly with the larger A350-1000 model .

Dreamliner

Boeing also launched the 787-10 this year, filling another market segment (Photo: Boeing)

However, Boeing also has the 787-8 (which is smaller than any A350) and the 777-9X (which is larger than any A350). The result is that while Airbus was able to save money by developing a single twin-engine widebody to serve a large swath of the market, Boeing can offer its customers a greater range of sizes. With unique planes at the bottom and top of the twin-engine widebody spectrum, Boeing can meet the needs of any airline, in a way that Airbus cannot.

No good solution

Right now, there are no particularly good options for Airbus. It's probably not feasible to stretch the A350 any further than it has already done with the A350-1000. On the other hand, if Airbus developed a true competitor to the 777X, it would cannibalize A350-1000 sales.

As a result, Airbus is likely to stand pat and try to compete on price with the A350 and A380. For the moment, the A380 also has the advantage of availability -- today, airlines are looking at nearly 10-year lead times for the 777X. However, in the long run, the superior economics of the new 777X can virtually guarantee Boeing a big lead over Airbus in the widebody market.

Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.