AEROSPACE

Life in the shadow of the American giant

The December announcement that Boeing will effectively take over domestic US rival McDonnell Douglas poses the severest of competition challenges to all European aerospace manufacturers.

An even tougher fight will take place between a strengthened Boeing’s 747-600X and Airbus’s A3XX in the market for superjumbos with 550 seats or more.

The A3XX will not be launched until late 1998, by when Airbus partner British Aerospace, with a 20% stake, hopes real progress will have been made in the politically sensitive transformation of Airbus’s management structure. The pending Boeing-McDonnell Douglas merger has already prompted an acceleration of this process.

The two airliner giants are also fighting over most of the rest of the market, which only opens up in the regional airliner sector, though even this is shared between fewer rivals now Fokker is out of the picture.

The recovery in the airliner market is more than a year old and all predictions say it will continue into the next century as the Asia-Pacific market grows.

Together with defence work, the civil recovery contributed to Britain’s £2 billion aerospace trade surplus in 1995, when almost £7 billion of exports were achieved. Last year’s figures should be similar.

If prospects for Britain’s civil aerospace work look reasonable, the most important military programme is fraught with uncertainty. Even though defence secretary Michael Portillo last September announced a UK commitment to produce Eurofighter 2000, Germany’s investment decision has been postponed to any time between the end of this month and March. That date is described as the `limit of tolerance’ for Eurofighter partners Britain, Italy and Spain.

BAe may try to secure its future through strategic alliances, but nothing can replace Eurofighter.

George Paloczi-Horvath