The World Trade Organization (WTO) any day now plans to issue an interim ruling on U.S. allegations over unfair subsidies made by European governments to Airbus.
Competition between Airbus and Boeing
In the face of the global economic recession, Airbus does not expect to reach its previously predicted 300 new orders this year and has switched its efforts to retaining as much of its order backlog as possible. Nevertheless, the EADS subsidiary believes the downturn in airline traffic is close to the bottom and that gradual economic recovery next year will be accompanied by improved market prospects.
Boeing and Airbus are still looking for the right balance in outsourcing, or at least for the right way to run the massively outsourced production organizations on which they base their latest airliner programs.
Airbus insists the A350-800XWB will make it to market on time in 2013, despite the company’s failure to close on plant divestments that would have helped pay for $1.5 billion in needed upgrades to key manufacturing sites.
When Airbus tentatively entered the corporate jet market a decade ago with the ACJ, its expectations for the airplane were modest. Success would be measured in single-digit sales primarily to wealthy individuals in the Middle East who dreamed of creating miniature flying palaces.
Delivery of the 561st Airbus A300 next month marks completion of the European manufacturer’s long march to becoming a successful competitor to its U.S. rival, Boeing, in the commercial aircraft market. It has developed, certified, marketed and completed profitable production of its initial design and embarked on a successor project.
The apparent delay in the launch of the Airbus A350 has raised the intrigue over the escalating subsidy row between Boeing and Airbus. A curt EADS statement released last Wednesday said it would not reach a decision on the A350 until September, scuttling speculation that Airbus would announce a launch here today with officials from Dubai’s Emirates.
John Douglass, president and CEO of the U.S. Aerospace Industries Association (AIA) firmly backs the Bush administration’s decision to proceed with its case at the World Trade Organization on the question of alleged direct and indirect subsidies provided to Airbus by four European Union member states.
Airbus statistics appear to support Boeing’s contentions that the average size of airliners is going to shrink. Smaller aircraft carry lower sticker prices and Airbus figures suggest Boeing’s backlog comprises aircraft with fewer seats and lower average values than those in the Airbus order book. The U.S.
Recent changes to the proposed Airbus A350 have rendered the planned A330 variant much more competitive against the Boeing 787 in the battle for the “middle of the market,” according to Airbus. The European airframer has refined the design, which now offers more seats and, consequently, lower seat-mile costs.