June 14, 2005

Boeing vs. Airbus

I knew that Airbus had been chipping away at Boeing's longtime dominance in the world aircraft market, but I hadn't heard that Boeing has since rallied strongly and has put "Airbus on the ropes".

From Der Spiegel:

While Boeing is practically fighting off demand for its new 787, which consumes significantly less jet fuel than earlier models, Airbus's managers are seemingly ripping each other apart in internal power struggles and intrigues.

Boeing has already received firm orders and commitments for over 260 787 Dreamliners, which is made entirely of lightweight synthetic materials. It's also using the technology and experience gained to update their popular 737 aircraft. Meanwhile, Airbus concentrated solely on it's A380 superjet and a new military jet, all but ignoring its aging small-to-midsize line of passenger jets.

Despite lots of buzz about the superjumbo, Airbus faces heavy customer penalties (measured in the tens of millions of Euros) as they recently announced that first deliveries will be delayed by at least six months. In addition, Airbus was once considered the leader in the competition to supply the US military with new tanker aircraft, but congress has since passed legislation forbidding the award of contracts to companies subsidized by governments, on the theory that such subsidies allow the artificial lowering of bid prices. Airbus now has almost no chance with the contract that they believed they could win.

Airbus isn't nearing collapse or bankruptcy, they've just squandered the chance to continue to grow their share of the world airliner market.

Thanks to Transterrestrial Musings for the pointer. Read the comments there too, because they bring up some points and counter-arguments that I hadn't heard or considered before.

Posted by Ted at June 14, 2005 04:36 AM
Category: SciTech
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