BOEING ANNOUNCES a production rate increase and the world is convinced, that the airline recession is over. Why is that so? Because Boeing, is both a bastion and a bellwether of the industry.

Boeing has been particularly successful recently with customers seeking a family of aircraft, whether it is either a larger companion to the 737 or a smaller stable-mate to the 747. It is becoming increasingly apparent, however, that the US manufacturer's greatest strength continues to lie with the 747, for which there is still no competition. What is more, the company's latest market forecast projects a massive demand for aircraft of 747-400 size and larger.

Airbus Industrie's crystal ball must be showing the same picture, as the European consortium is bound, and determined, to develop the all-new A3XX, its means to compete head-on with the 747 and its derivatives. As a first step, Airbus may launch the A340-600, a stretched and re-engined version of its longest-range aircraft.

If it is true that Airbus and Boeing need larger aircraft for customers to grow into, then it can be argued that the smaller ends of their ranges need similar attention. The regional market has always been treated as a series of niches, with no one manufacturer serving them all. Now, however, consolidation is beginning to create companies with broader product bases.

One of those is Aero International (Regional) (AI(R)), which has a close affiliation with Airbus through common owners. AI(R) is now studying a regional jet and its deliberations are being coordinated with those of Airbus, as it looks below its present narrow-body line. The potential now exists for AI(R) and Airbus together to create a seamless range of even greater breadth than Boeing's.

With the departure of Fokker from the regional-jet market, the short-listing of AI(R) and Boeing to partner China on the AE-100 regional airliner takes on even greater significance. If AI(R) wins, will Boeing lose the chance to create a mechanism with which to feed new customers into its existing range? Can Airbus and AI(R) come together to dominate the lower end of the market, as Boeing now does at the large end?

China's decision is imminent, and comes at a time when the country's relations with the USA are at their worst in recent history. It is beginning to look possible that Boeing may well lose more from the present political posturing than just the orders which Chinese airlines were expected to place.

Source: Flight International