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Aviation History
1996
1996 - 0057.PDF
EDITORIAL UK Editorial Enquiries Editorial Fax Editor Allan Winn Editor's PA Lisa Jenkins Deputy Editor Forbes Mutch News Editor Andrew Chuter Operations/Safety Editor David Learmount Business Editor Kevin OToole Commercial Aviation Editor Kieran Daly Defence Aviation Editor Douglas Barrie Aviation Research Editor Jennifer Pite Technical Reporter Andrew Doyle Editorial Assistant Kate Sarsfield Production Editor Chris Thornton Art Editor Alexis Rendell Layout Sub-Editor Annabel Wells Technical Artist Tim Hall Technical Artist David Hatchard Technical Artist Giuseppe Picarella Spaceflight Correspondent Tim Furniss Photographer (Europe) Mark Wagner Picture Librarian: Kim Hearn EUROPE/MIDDLE EAST European Editor Julian Moxon +44(181)652 3842 +44(181)652 3840 +44 (181) 652 3882 +44 (181) 652 3882 +44 (181) 652 3852 +44 (181) 652 3843 +44(181)652 3845 +44 (181) 652 3835 +44(181)652 3837 +44(181)652 3834 +44 (181) 652 3847 +44(181)652 3838 +44(181)652 3842 +44 (181) 652 3850 +44 (181) 652 3828 +44(181)652 3848 +44 (181) 652 8047 +44 (181) 652 8047 +44(181)652 8054 +44(1237)471960 +44 (181) 944 5225 +44 (181) 652 3427 COMMENT +33(1)46 29 47 61 [Fax +33 (1) 46 29 47 49] Munich Correspondent Andrzej Jeziorski +49 (89) 6891041 [Fax+49 (89) 689 1045] Paris Correspondent Gilbert Sedbon +33 (1) 48 25 52 61 Israel Correspondent Arie Egozi +972 (3) 9671155 Moscow Correspondent +7 (095) 393 4717 Alexander Velovich [Fax +7 (095) 393 4717] AMERICAS American Editor Graham Warwick +1 (770) 587 2927 [Fax +1 (770) 5941534] Washington Correspondent Ramon Lopez +1 (703) 836 7443 [Fax+1(703) 836 8344] West Coast Correspondent Guy Norris +1 (714) 252 8971 [Fax +1 (714) 252 8972] 4S/4 PACIFIC Asian Editor (Singapore) Paul Lewis Australian Correspondent Paul Phelan +65 226 3188 [Fax+65 227 1769] +61(70)532 791 [Fax+61 (70) 533 003] DISPLAY ADVERTISEMENT SALES UK and EUROPE Display Advertising Enquiries +44 (181) 652 3315 Display Advertising Fax +44 (181) 652 8981 Group Advertisement Director Trevor Parker +44 (181) 652 3319 Secretary Lisa Devlin +44 (181) 652 3315 Advertisement Production Display/Classified Howard Mason +44 (181) 652 3267 EAST EUROPE, GERMANY, SCANDINAVIA, UK Senior Area Manager Robin Gordon +44 (181) 652 4998 NETHERLANDS, PORTUGAL, SPAIN, UK Area Manager Janice Lowe +44 (181) 652 3316 FRANCE Sales Director France Pierre Mussard ITALY Representative Romano Ferrario NORTH AMERICA Vice-president US Sales John Tidy Sales Director East Coast Robert Hancock Sales Director Mid-West & Canada Gene Glendinning Traffic Manager Debbie Kolb MIDDLE EAST Robin Gordon ASIA. AUSTRALIA +33 (1) 46 29 46 29 [Fax+33 (1)40 93 03 37] +39(2)6603 4435 [Fax+39 (2) 6603 4367] +1 (714) 7561057 [Fax +1 (714) 756 2514] +1 (703) 836 7444 [Fax+1(703) 836 7446] +1 (708) 304 5588 [Fax+1(708) 304 9559] +1(212)545 5376 [Fax+1(212) 679 9455] +44(181)652 4998 Singapore Account Manager Karen Kwan +65 226 3188 [Fax +65 223 6960] CLASSIFIED & RECRUITMENT Group Advertisement Manager Gareth Pask International Sales Executives Mo Buttivant Judith Slann Classified Sales Executives Sarah Harvey Simon Lees Lucy Middelboe Enquiries Classified USA Gail Tavelman Classified Asia/Pacific Karen Kwan Publisher Gavin Howe +44 (181) 652 4814 +44(181)770 3032 +44(181)770 3011 +44(181)770 3010 +44 (181) 770 3027 +44 (181) 770 3030 +44 (181) 6616373 +1 (212) 545 5403 +65 226 3188 +44(181)652 3675 FILLING THE GAP THE 1995 BUSINESS FIGURES for the airliner manufacturers tell many stories. Boeing regained market leadership with an outstanding year, selling 346 aircraft worth some $31.2 bil lion. Airbus Industrie, which outsold Boeing in 1994, dropped back into second place in 1995, but delivered more aircraft than ever, giving it record revenues. McDonnell Douglas, so often writ ten off by the pundits as an airliner manufac turer, bounced back with, among other things, the successful launch of its MD-95. The most important story which these fig ures tell is, however, the continued impor tance of the most significant jet airliner ever, the Boeing 747, to both Boeing and Airbus. For Boeing, the 747 not only generated a hefty $6.5 billion in new business, but also acted as the seemingly ideal partner for the 777 in a balanced offering to airlines. For Airbus, the continued success of the 747 underlined just how glaring is the gap at the top of its own range. This was the first year in which Boeing could show its 747/777 range combination in service against the Airbus A330/340 range: that was important for those airlines which prefer to wait and see an aircraft successfully introduced into ser vice before they will consider buying. On the evi dence of the year, the 747/777 has the edge. It was significant that, in the big "headline" orders from Singapore Airlines, Korean Air, Philippine Airlines and South African Airways, no matter which big twin was chosen the 747 was selected as well. For Airbus Industrie, these results have re affirmed the need for a 747 competitor—not nec essarily a competitor for today's 747, but for tomorrow's proposed re-engineered and stretched 747-500 and 600. The problem for Airbus remains of how to justify the massive cost of launching an expensive new project such as its pro posed A3XX against such entrenched opposition. Technically, Airbus Industrie is more than capable of building such a machine and giving Boeing a run for its money, but the commercial case is less easy to balance. Airbus has to offer operating costs some 15% lower than those of the 747 to attract business away from that aircraft. It can go a long way "The costs of developing new derivatives of the 747 will be much lower than those of an all-new A3XX." towards that figure through building a more effi cient structure and aerodynamics than those of the near-30-year-old 747, even allowing for sig nificant improvements in the latest 747s. What is a much more difficult problem for Airbus is being able to match Boeing on production costs, essential if cus tomers are to be tempt ed with an attractive purchase price. Boeing long ago amortised the basic development costs of the 747, and must by now have more than recov ered the development cost of the 747400. The costs of developing new derivatives will be much lower than the costs of developing an all-new A3XX (which are now set at some $8 billion, almost twice as much as was committed to developing die 777). More importantly, however, the groupement d'interet ecomrmique structure of Airbus Industrie restricts the organisation's ability to profit from economies of manufacture in the same way that Boeing or McDonnell Douglas can. Airbus Industrie is, in effect, a co-ordination and sales operation, not a manufacturer. Much of the design and all of the manufacturing of Airbus aircraft is carried out by the four partner com panies and their subcontractors, in rigidly defined proportions. If a partner company makes economies in design or manufacturing, that is reflected not in the asking or selling price of the aircraft, but in the profitability of the partner concerned. Airbus has far less ability to negotiate prices downward with its partner sup pliers than does Boeing with its subcontractor suppliers or even its risk-sharing suppliers. That leaves Airbus in a difficult position. There are few questions over its ability to create a world-beating product-line, with world-beat ing technology, as it proved with the introduc tion of fly-by-wire to the jet airliner industry. What Airbus cannot do, however, is take a lead on price. While it can and does match market prices, it clearly lacks the same freedom as Boeing to take the initiative in slashing the underlying cost of production and passing that saving onto the customer. Ultimately, it may be a solution to that problem rather the issue of product lines, which holds the real key to the future success of Airbus. • FLIGHT INTERNATIONAL 10 - 16 January 1996
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