Airbus Victorious Over Boeing?

Know what one of my pet peeves is? Aviation related articles written by business writers. They will often make some of the most ignorant statements ever seen in journalistic writing. This article from Business Week crowing about the great Airbus "victory" over Boeing in the widebody market is no exception. The sad part is most readers will buy it as gospel.

The biggest omission that the author commits is failing to acknowledge that the big boys, the Deltas, Americans, and Uniteds of the world have already committed to contracts, in the case of American and Delta exclusively with Boeing (United is still buying a mixed fleet of both manufacturers products). Orders from the second tier airlines like Emirates, Korean Air, and Gulf Air are nice, but the bread and butter are still the majors and they belong mainly to Boeing.

Why? Because Boeing still builds the best damn airplane flying. I've worked on Boeings, Lockheeds, McDonnell Douglases, Airbuses, and Ilyusians. The Boeings were the most reliable, most forgiving, and most efficient airplanes I worked with. They were built like tanks and could lift just about everything you could find to load on it. It was very rare to get a Boeing near its capacity. The McDonnell Douglases and Airbuses, on the other hand, would just barely get the luggage on before they were already pushing weight restrictions. We had a saying: "If it ain't Boeing, it ain't going." And it was true. If we had a busted airplane, we could be almost positive it was either a Lockheed, a McDonnell Douglas, or lucky to still be around.

The Boeing designs are also lasting. Look at the comment that the A330 has "killed off the Boeing 767." The 767 design is now over 25 years old. It was originally designed in 1978, first flying in 1982. The A330 first flew in 1996. Airbus didn't kill off the 767 line, age did. Even the 727 production line only lasted for 20 years. With 14 more years to study, plan, and develop it's no wonder that the A330 is a more efficient (though not necessarily better in all ways) airplane than the 767.

I agree that there are problems at Boeing. They really dropped the ball by not developing more new aircraft over the last decade. The 777 is a magnificent airplane and it really did almost kill off the A340 line. It also forced Airbus to change their marketing of the A330 to go after 767 prospects, as they knew it couldn't compete with the 777. Problem is the 777 by itself wasn't enough.

The airliner market is really divided into four distinct markets: regionals, the 737/A320 market, the 767/777/A330/A340 market, and the 747 class market. Boeing really has dropped the ball on the regionals, while Airbus has the A318 100 seater. In the 737/A320 market, Boeing has maintained an advantage with the 737 and 757 aircraft being far superior to the A320 series counterparts. Unfortunately, the flag carriers of Europe have helped to subsidize Airbus, causing a loss of market share by Boeing. In the 767/A330 market, market share has maintained relatively the same with Boeing's gains from the 777 being offset by their losses with the 767.

Which brings us to the 747 size aircraft market. Boeing took a big gamble by not doing anything in this market. If the A380 really gets off the board and into full-scale production (which isn't a guarantee yet), Boeing stands to lose substantially. However, if the A380 dies, or is a failure in service, Boeing could bring back their 747 stretches again and make a fortune. But Boeing is really taking a gamble here.

And therein lies the real problem at Boeing. Since the buyout of McDonnell Douglas, they have been losing market share. Some has been lost to European flag carrier politics; most has been lost due to a lack of clear direction from the company. Boeing quit paying serious attention to the commercial airliner market back after the development of the 757/767 series. Since then, they have been resting on their laurels and gambling with the future of their company.

Boeing is almost certainly correct in their claim that the European governments are subsidizing Airbus. But until recently, Boeing could overcome the unfair advantage through building a better airplane. They're still capable of doing so: even Air France wanted the 777, despite the howls of protest from Toulouse.

Boeing is losing ground because they don't have a strategy. There is no master plan to follow in Seattle. Airbus to their credit has a plan and they're communicating it to their clients.

With the 7E7 Dreamliner, Boeing is coming from behind. They've done it before with the 737 (which came out after the DC-9, among others). But this time there is even less room for error.

Maybe they should have spent more time designing new airplanes and less planning their great corporate move to Chicago. They're going to have to take another great corporate gamble again soon. Probably close in scale to that of the 747 gamble.

They had best start stacking the deck, now.