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Aviation History
2001
2001 - 0064.PDF
AIRBUS AT THIRTY Market timing Boeing thinks the A380 needs more than just a new name to succeed The debate rumbles on over whether there is enough demand for an all-new ultra-large aircraft in 2006 MAX KINGSLEY-JONES/LONDON WITH AN ORDER and option tally for more than 80 A3 80s in the bag from some of the world's blue chip airlines, it would be a brave person who tells Airbus Industrie that it has got its sums wrong. But that is exactly what Boeing continues to do as it remains adamant that its rival's market pro jections are way off the mark. So why is Airbus so sure about its forecast that it is prepared to stake an $ 11 billion programme on it? The fact is that Airbus has rarely shared Boeing's view of the market. Right from the start of the original A3 00 programme, the US manufacturer, much to its cost later, dismissed the Europeans' plans as folly. There were simi lar differences of opinion when Airbus entered the 150-seat market, a sector in which, 16 years later, it has sold more than 2,600 aircraft. Airbus' year 2000 global market forecast (GMF) puts ultra-large aircraft (with more than 400 seats) demand at 1,235 passenger aircraft and 315 freighters - a total of 1,5 5 0 aircraft over die next 20 years. The GMF estimate has been fairly consistent over die past five years since Airbus undertook serious studies of an all-new 5 50-seat airliner. Boeing is gradually increasing its 20-year forecast for demand in the 747 size and larger category, but remains doubtful that airlines will want large numbers of A380-size aircraft. The US manufacturer puts demand at 1,010 aircraft, of which just 740 are passenger aircraft. Of these, only 3 3 0 will be in die A3 80 catego ry (450 seats plus), says Boeing, and the rest will be 747-sized (400-500 seats). More than half the 2 70 freighters in the forecast will be in the ultra- large category, boosting the overall market pre diction to about 500 units. The two rivals' views also differ on the timing of the market, with Airbus confident that there will be strong demand from the moment the A380 enters service in early 2006, and Boeing less optimistic. Airbus expects the world to need 360 large passenger aircraft through to 2009, while Boeing puts the figure for 500-plus seaters at just 87. An estimated 875 more aircraft will be needed between 2010 and 2019, says Airbus, while Boeing says it will be just 243."At this point in time, we see some demand - but not until the 2010 to 2019 timeframe," says Gordon McHenry, Boeing's director of marketing development. CONTINUING CONFIDENCE Despite Boeing's pessimism, Airbus is sticking to its guns. It dismisses Boeing's view that frag mentation of route networks will focus demand on smaller widebodies, and says that while this will occur to a certain extent, congestion and infrastructure restraints will force airlines to move to larger aircraft to keep pace with pas senger growth. Even Airbus' forecast does not make the A380's market huge in overall unit terms (10% of the 15,400 new passenger and freighter air craft), but these giant aircraft are set to represent more than a quarter of the $1,300 billion that airliner sales (passengers and freighters) will generate over the next 20 years. "The 20-year [A3 80 category] market is worth over $343 billion, and we simply couldn't leave it all to Boeing," says Airbus financial controller Ian Massey. "We expect to capture at least 50% of sales. We say we want half the market, and if we ignore the high end, then we are aiming for 50% of 75% of the overall market, so we will only effectively have a 30% share." Given its negative view of the market, Boeing seems unconcerned about the rush of orders for the A3 80. It is offering a stretched 747-based rival, the 747X, but has so far been beaten fair and square by the A3 80 in a couple of high-pro file campaigns at Singapore Airlines and Qantas. "I don't see [the loss of these orders] as a setback at all," says Boeing Commercial Airplanes pres ident Alan Mulally. "It is an endorsement of a trend we see for longer-range aircraft. It is a pos itive sign. We also recognise that there is a need for bigger aircraft, but we think the majority will be sized around the 747X." McHenry says: "The A3XX orders we have seen so far are fully in line with what our model would predict, and there is nothing that would give me cause to change thatprediction. What's interesting is that, because of the favourable pricing, Airbus has accelerated orders for a product that the market doesn't need." And Randy Baseler, Boeing vice-president marketing, adds: "Fifteen to 20 years out, maybe there will be enough demand for an all-new aircraft. At the moment there's no need for it." It should be no surprise, then, that Airbus is not letting Boeing's public position on the market lull it into a false sense of security. According to Toulouse insiders, the consor tium considers Boeing's 747X derivative as purely a short-term spoiling ploy, and the European company's strategic planning assumes that the A3 80 will face an all-new large aircraft from Boeing in the marketplace by the end of the decade. J 62 FLIGHT INTERNATIONAL 2 - 8 January 2001
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