PrintAirbus runs into rough weather
Airbus is emblematic of the entire EU: bloated by bureaucrats and run by incompetents who overpromise and underdeliver. Airbus was designed to puncture Boeing, formerly the dominant producer of civil airliners.
Airbus was to be one of the business components of the strategy by Europeans to harm America and to help bring about the emergence of the utopian (from their viewpoint) multipolar world. Billions of European taxpayer dollars (make that marks, francs, pounds and now euros) were squandered on this mindless beast. Illegal subsidies were granted to Airbus to get this plane out the hangar.
Yet, as the facts come out, this is just one more expensive disaster that European "leaders" have inflicted upon their people. FortuneMagazine writes:
...the Airbus A380 is beginning to look like the aviation equivalent of Moby Dick. Just getting the 555—seat plane off the ground, as Airbus did in late April, was an achievement, and the plane appears to be on schedule for delivery in the second half of 2006 to the first customer, Singapore Airlines (153 others have been ordered). [Actually, delivery has just now been announced to be delayed by "three to six months." Airbus blames its customers for demanding customized interiors. But other unspecified causes are also hinted at — ed.] But Boeing smartly avoided competing with Airbus's $12 billion baby and instead developed the smaller 787. Though it won't begin service till 2008, Boeing has already logged 261 orders. With a list price of $240 million, "the market demand for an airplane the size of the A380 is 340 to 400 planes," says Denver—based aviation consultant Michael Boyd. "Boeing's building an airliner that fits an existing niche—replacement for 1,500 to 2,000 airliners in the 175— to 250—seat range"—at roughly half the price of an A380.
Boeing's rise represents the latest phase of an epic dispute between the two companies about what airline customers want. Airbus has long believed that high—density routes, overcrowded airports, and limited travel budgets create demand for giant haulers like the A380. Boeing is betting passengers will opt for more frequent trips in smaller planes that fly direct between less—traveled city pairs like Seattle—Seoul. Instead of reaching for economies of scale, it is developing advanced materials and engines that reduce weight and fuel costs.
Smaller planes also give Boeing more flexibility. Both Boeing and Airbus forecast sales of some 2,600 planes, with capacity between 300 and 450 passengers, over the next 20 years. But Airbus left that range all but unprotected while it worked on the A380; meanwhile, Boeing sells two planes in that segment and is planning a third.
For years Airbus has taken shots at Boeing for its reluctance to develop new airplanes and its less than aggressive sales force. Now Boeing is firing back. In April the company released a report to a pair of journalists in Britain that it had commissioned from independent analysts. The report says that Airbus is heavily discounting A380s, selling planes that cost $199 million to produce (in 2001 U.S. dollars) for as little as $130 million in an effort to reach its sales targets. Result: negative cash flow of more than $8 billion on the plane well into the next decade. An Airbus spokesman calls the study "flawed in its assumptions."
Ed Lasky 6 2 05
