Boeing has fired its latest salvo against rival aerospace giant Airbus in what is shaping up as one of the bitterest commercial dogfights of recent times.
The US company claimed its European counterpart has got its forecasts of future air travel patterns wrong, is being forced to sell aircraft at big discounts to win orders and will struggle to repay state loans.
Airbus, 20 per cent owned by BAE Systems, countered that it is well on course to meet all of its commercial targets, and thatBoeing is simply rattled at seeing decades of domination of the civil aircraft sector vanishing.
Two new aircraft, the Airbus A380 ‘superjumbo’ and Boeing’s 7E7 Dreamliner, are at the heart of the war of words.
Airbus believes the 550-seat A380 will be needed to move ever increasing numbers of passengers between aviation ‘mega-hubs’ such as Heathrow and JFK.
But at a briefing in London, Randy Baseler, vice-president of marketing at Boeing’s commercial aircraft division, claimed that Airbus was ‘betting the ranch’ on the A380 and had dramatically overestimated demand for the new planes.
The US manufacturer, which led the charge to build giant passenger aircraft 30 years ago with the 747, is now counting on the trend going into reverse.
Boeing is convinced that the 200 to 250-seat 7E7 will meet growing demand for ‘point-to-point’ services that can fly directly between regional airports on either short or long-haul flights. It is a crucial part of Boeing’s bid to reclaim its lead in the commercial aviation market after being overtaken by the Europeans in aircraft delivery terms for the first time last year.
Due to enter service in 2008, Boeing claimed the Dreamliner will break new ground in terms of efficiency and passenger comfort. It is designed to use 20 per cent less fuel than comparable aircraft,as well as reducing emissions and noise.
Airbus is equally keen to claim the environmental high ground for the A380, which it has labelled the ‘green giant.’ Alongside low fuel consumption, the Europeans make one central argument for the A380’s environmental credentials – more passengers on board equals fewer aircraft in the skies.
But Baseler claimed that many of the passengers flying on A380s from airports such as Heathrow would need to be shuttled there by feeder services of smaller aircraft, so adding to the congestion.The decisive factor will, however, be the willingness of airlines to buy the planes. Airbus forecasts a total market of some 1,200 passenger aircraft larger than 400 seats over the next 20 years. Boeing predicts the figure will be a quarter of that, with airlines flocking to the middle section of the market.
Baseler confirmed that it would announce its first airline customer for the 7E7 ($120m) in the first half of the year. This is likely to be a carrier in the Asia-Pacific region, but Baseler said Boeing had also been talking to the UK’s major airlines during the 7E7’s development. True to form, Boeing and Airbus both claim to offer airlines the best deal. The Americans claimed small and mid-size aircraft give them more flexibility to meet customer demand and avoid having to fly half-full planes during a downturn.
Airbus maintains that relentlessly increasing demand for air travel will fill the A380s, and that the economics of exclusively flying smaller planes – each one needing its own pilot, cabin crew and airport facilities – simply do not stack up. It said other models in its stable such as the A340 were more than adequate to meet demand for smaller aircraft.
Airbus has 129 confirmed orders for the A380. In a final swipe at his rival, Baseler claimed that even the current A380 order book was based on selling the planes at below their list price ($230m). He also questioned how Airbus would pay back $3.5bn (£1.9bn) in launch loans from European governments.
A spokeswoman for the European group rejected Boeing’s analysis of Airbus’s commercial position. On discounted sales, she said: ‘We always sell our aircraft at a profit.’ She added that Airbus was operating in accordance with agreements reached with various governments on repayable state aid, with both budgets and timings on course.
One thing Boeing and Airbus agree on is that both cannot be right – there will either be a significant market for 500-seat plus passenger aircraft or there won’t.
‘We will know by 2012 who has got it right or wrong,’ said Baseler.