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"A Dog Fight Between Airliners" (A Vs B) NY Times

Thu Apr 14, 2005 5:22 am

A Dogfight Between Jetliners

"FRANKFURT, April 12 - A funny thing happened while the United States was crying foul over Europe's subsidies to its aircraft maker Airbus: Boeing, the embattled American manufacturer in need of Washington's helping hand, suddenly started booking orders for planes.

A spate of orders for Boeing's new 787 has allowed the company to catch a second wind in this fiercely competitive marketplace. What seemed last year like a lopsided competition - with Airbus rolling up more orders and rolling out more new planes than Boeing - now seems like a genuine duel.

On Monday, Korean Air Lines announced an order for 10 787's, a midsize, fuel-efficient jet dubbed the Dreamliner. Northwest Airlines is near a deal to buy as many as 18, according to people close to the talks. After a slow start, Boeing says it has 203 orders and commitments for the plane.

Boeing has been buoyed by a mix of aggressive salesmanship and rising concerns about oil prices, as well as doubts about Airbus's plans for a rival plane, given the possible loss of its subsidies.

It is not clear that Boeing's success will change the course of the trans-Atlantic tussle, which is in a lull after a deadline to take the matter to the World Trade Organization expired on Monday.

Some analysts believe the 787's recent strides will make subsidies all the more imperative for Airbus as it develops the A350, a midsize rival to Boeing's plane. The loans for this project, which could total $1.3 billion, are the critical sticking point between the United States and Europe.

Trade officials on both sides say they are open to restarting settlement negotiations. But as the standoff drags on, the shift in the fortunes of Boeing and Airbus, even if transitory, adds an unpredictable new element to both the political and commercial showdown.

The longer that financing for the A350's remains unresolved, analysts say, the more pressure Airbus will face. The company, which is based in Toulouse, France, and is owned by Europe's military-contracting industry, insists it can develop the plane without so-called launch aid. But with Boeing busily signing customers for the 787, even a modest delay could hobble the project.

"At some point, Airbus may have to say, 'This isn't the right plane anymore. Maybe the solution is to design an entirely new one,' " said Howard A. Rubel, an analyst at Jeffries & Company."

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RE: "A Dog Fight Between Airliners" (A Vs B) NY Times

Thu Apr 14, 2005 5:33 am

Interesting bits. Airbus is pretty clearly in damage control mode since Leahy is in absolutly every single interview out there. It's also interesting that Airbus is making the same mistake as Boeing made (distributing sales projections for a new plane - everyone then wants a discount to help the airline make that goal). Given that there are articles in three rather noted papers, it sounds like Analyists are on death watch on the A350.

Puts on his wild speculation out of his arse hat:

If Air India comes back Boeing, I think the A350 in it's current form is toast. Airbus will have to add more composites, rethink the wing and maybe the engines.

If on the other hand, Oil continues to slide off of the $55 high, the A350 may just make it.

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