Boeing Questions Airbus A380 Optimism

[Joshua949]

Boeing Questions Airbus A380 Optimism
March 26, 2004

US plane-maker Boeing said its rival Airbus may sell so few of its 555-seater superjumbo aircraft it could be unable to repay the USD$3.5 billion in launch funds loaned by governments, the UK's Guardian newspaper said on Friday.

The newspaper said Randy Baseler, head of marketing for Boeing's commercial airplanes, ridiculed Airbus' forecast global demand of 1,138 planes. He said demand was at most 320 and Airbus would find it impossible to break even on sales of 250 A380s.

The paper said Baseler said Airbus had won its first 129 orders for the A380 by offering airlines a 40 percent discount on the USD$230 million list price.

Boeing has been overtaken by Airbus as the world's top commercial planemaker, after the European firm topped it in deliveries in 2003 for the first time. The rivals have been in a long-running dispute about the level of demand for the superjumbo, which Airbus plans to start delivering in 2006.

 

[FL270]

I think Boeing may be right that the Airbus forecast is a little optimistic, but you have to look at where they're coming from. Right now, they have no product offering that can compete with the A380. Boeing is cutting back the number of variants it is still producing (note the end of the 757 line) while Airbus is expanding. They have in current production an airplane that fills almost every niche from 100 to 600 seats and from short-haul to ultra-long-haul service.

I think Boeing has got a little of the "David Siegel Syndrome" ... you know, howl about how your competition is killing you rather than trying to do something about it!

And this is from a guy who always used to say, "If it ain't Boeing, I ain't going!"

 

[danielsexton]

Airbus' side of the story:

Airbus, which sees the first A380 fly with Singapore in 2006, attacked Baseler's comments as "ridiculous" and "absolute rubbish."

"The suggestion we are going around the world trying to dump this aircraft in order to get it off the ground is nonsense," an insider said. "The price is up to $260m now."

Last week Iain Gray, Airbus UK managing director, said the A380 was the most successful launch in Airbus history, with plans to increase production to 50 aircraft a year. At least one new customer is expected this year.

Now, my commentary:

It seems to me Airbus is betting the farm on the Ultra-Large, Ultra-Long Haul A380. While Boeing is betting the farm on the Mid-Sized, Mid-Ranged 7E7, time will tell who will win out. Of course there is the possibility they could both win, one filling one niche market and the filling another niche market.

However Airbus has been making gains on Boeing for years and if the 7E7 goes flop I could see Boeing with some real BIG problems in the commercial aviation market, maybe even exiting commercial aviation and focusing on US military projects where they don't have to compete with Airbus, but then of course there is competition in that arena too.

I personally hope Boeing wins out as I would hate to see the loss of American jobs if Boeing were to exit or scale down there commercial aviation line. Just my .02 cents.

 

[Prospective_Pilot]

[ QUOTE ]
........I would hate to see the loss of American jobs if Boeing were to exit or scale down.......

[/ QUOTE ]

I think they have already done that as many other U.S companies have. I get emails all the time from Boeing announcing that X number are going to be laid off or how some new executive is on board. Do they even realize that while they are all sitting in their chairs their market is being eaten away slowly as their customers start to turn towards their rival

What they need to be doing is focusing on is their competition....I don't even think they give one rat that Airbus are now the # 1 aircraft manufacurer in the world..

And as for their 7E7 I really think their estimate of 2,000 - 3,000 unit market for the plane is somewhat too optomistic!!! But if it is possible then sure is Airbus's reasonable prediction of 1,000 and something A380's....I don't believe Airbus's prediction is any where off the scale. Those airlines who have already ordered it will possibly end up with twice as many as they have on order now.... that's over 250 right there with those few airlines.... Airbus are very competitive while Boeing seem to be sitting in there chairs mocking Airbus's success.. Boeings future is at stake just as I believe the U.S economy may also be. If this 7E7 isn't successful then I could see it as the end of them!!

And then what are all those hardcore anti-Airbus pro-Boeing "If it's not Boeing, I ain't going" freaks going to be saying then?

I'm neither Boeing freak or an Airbus freak, I don't care about their political side of things, all I care about is their reliable products that I may fly one day!!! They both make superb aircraft....and in the end planes are planes it really isn't so important who they are made by just as long as they all fly properly

....

 

[MikeD]

Boeing's ex CEO being canned hasn't helped the company. It's questionable 767 tanker proposal that would be a taxpayer ripoff of the n-th degree is questionable as well.

Boeing isn't doing so hot right now, IMO.