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Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 5/98 BOEING AND AIRBUS FIGHT IT OUT by Norbert Burgner Business as usual for the only two remaining competitors in the big aeroplane business: Boeing contra Airbus or "mirror mirror on the wall, who is selling the most airliners of them all?" No other plane manufacturer in the world can satisfy every customer's demands with a more comprehensive product line than Boeing, claimed the market leader in Singapore. It therefore comes at no surprise, says Boeing, that the Asian Pacific carriers have ordered 1150 jetliners from Boeing over the last ten years. This is three times more than has been ordered from Airbus. In all there are said to be 1479 Boeing planes in use in this region with another 377 on order ready to be delivered soon. The airlines of the highest-population continent place their money on the high capacity 747. That is why more than half of the 1295 orders for the Jumbo-Jet, which has been on the market since 1969, have come from Asian and Pacific carriers. According to Boeing seating capacity was the key to the Mega-Twin 777's success in this region. For the word's biggest twin jet propelled plane over 50 per cent of the 170 orders so far were placed in the Asian Pacific region. The first seven customers for the new 777-300 version, the world's longest airliner, are all from Asia: orders were placed by Cathay Pacific, All Nippon, Japan Airlines, Singapore Airlines, Malaysia Airlines, Thai Airways and Korean Air. Boeing's marketing experts inform us that the reason for this successful liaison is not only the high quality of their product, it has its roots in the history of the Boeing Corporation. William Boeing employed the Peking born engineer Wang Tsu, only a few months after founding the company in 1916. In 1918 New Zealand became the first international customer for the still very young company. The first Trans-Pacific flights by Boeing 314 Clipper touched down in Hong Kong in 1939. During the same year Boeing opened the world's first Field-Service-Office in Peking. 20 years later the Australian Quantas and Air India started jet traffic between Asia and Europe with the legendary 707. In 1972 an All Nippon Airways order started the 727-200 program, and a year later Japan Airlines flew the first short haul 747, the -100SR, (Short Range). Today the Boeing Commercial Group does not only have excellent contacts with Asia's most important carriers, but also with over 150 regional suppliers. These firms are said to have done business with Boeing in 1997 to the tune of 700 million US dollars and thus secured about 22,000 jobs in the region. However, despite these excellent business connections, and the knowledge resulting from these close links, the plane builders from Seattle have not managed to overcome the need for a plane like the arch rival's Airbus A3XX. Chief-strategist Joe Ozimek explains: "In the last 30 years almost 1,300 747s were sold, and 75 per cent of these are being operated by no more than 25 airlines. At the forefront are big customers like Japan Airlines with over 110, British Airways with approx. 80 or Singapore Airlines with about 70 planes of this type. 60 are in use with the US-Carrier Unites Airlines and around 50 with Northwest. World famous carriers like Cathay Pacific and Lufthansa have 747-fleets that are "only" 30 or 40 planes strong. If we follow the prognosis of our European competitors, who are convinced that there is a potential for over 1,400 planes of the A3XX type, then each airline operating planes the size of the 747 would have to purchase 63 A3XX. Even the biggest carriers like BA and SIA have up to now only expressed an interest for no more than ten "Mega-Liners" manufactured in Toulouse. Facing those numbers this project just cannot be profitable. And I cannot foresee that this situation will be changed drastically when the A3XX becomes readily available in 2004. Despite talk of overfilled airspace and airports, there does not seem to be a business-case for this aircraft." Due to Ozimek it'll be the better idea to stretch the wingroot of the increased grooss weight 747-400IGW (MTOW 412,000kg) by 2.4 meters in order to create room for a further 57,000 litres of fuel. The would bring the fuel capacity to 300,000 litres. Furthermore after the necessary reinforcement of the fuselage, the seating capacity could be increased to provide room for 60 more passengers. This would enable the 747-400 to transport approx. 500 passengers over distances of up to 16,000 km. In doing this the Boeing project would come a lot nearer to fulfilling the customers' requirements than the European competitor would be able to. The only question is which new 747 version will prompt the customer to actually place an order. The varieties, which have been introduced at each new air show after the 747-500/600 project came to its conclusion two years ago, obviously did not hit the spot. Among these were the 747-400LRX, the -400X-Stretch, the -400ERY-Stretch and the -400ERX. A different fate is planned for the civil version of the military heavy load transport plane C-17. Boeing, formerly McDonnell Douglas, MDD, has the following motto for its Airlift and Tanker Division in California's Long Beach: "From C-17 Globemaster to MD-17 Commercial Globemaster." This year's Asian Aerospace was the opportunity to announce a restart to the program's marketing campaign, being scheduled to begint at the end of 1998. If everything goes according to plan, certification will be in 2001. Before this can happen, the MD-17 has to be "de-militarised" - mid air refuelling systems are not needed in civil aviation. After that, the Boeing marketing department assures, the MD-17 will be a seller. There are optimistic predictions that there will be a requirement for up to 30 planes from the outset. At least this it the manufacturer's optimistic opinion. However, what the customer is going to get for a list price of 175 million US dollars, will not quite reach the cargo volume, (591.8 m3), of the 747-400F (758.4 m3). Via the plane's enormous tail-gate, which is 5.5 meters wide and 4.11 meters high, those unwieldy goods, which the 747, (3.56 meters by 2,49 meters), is not able to take, can be loaded easily. However, there remains the question of how big the market is for planes like the MD-17. The big so-called "Integrators" like FedEx, UPS or DHL do not base their success on "outsized cargo". Special carriers, like the English "Heavylift" have specialised in doing this and are amongst others operating with the Russian giant transport plane Antonow An-124. But firms like that cannot be compared with the aforementioned "Global-Players", as far as their financial clout is concerned. The question to be asked is, where the money for one or even more MD-17 is going to come from. From the parent company, the norwegian Kvaerner-Group. Rumour has it that Kvaerner is going to order up to seven units - and wetlease at least three to the Royal Air Force. As with the freight version of the MD-11, or the renamed Boeing 717 (former MD-95), the market leader, as with the MD-17, is trying to find commercial use also for military Ex-MDD-Programs. Admittedly McDonnell Douglas tried doing this some years ago however, Boeing has the much stronger marketing department. For the last time Airbus-Boss Jean Pierson had to deal with this "organism" in Singapore. The Frenchman, who is leaving his post after 13 years, summarised the rise of the plane building consortium, which is made up of four nations. The occasion was his last public speech. "My term of office coincided with a period of very intensive development in the history of aviation. During this time no less than eight new high technological airliner programs were introduced - seven of these originated in Toulouse. Our power of innovation helped us tremendously to increase our market share successfully. In 1985 our share of international airliner sales was below ten per cent. However, we managed to win more than 50 per cent of the market share in 1997, i.e. with orders of 671 planes valued at 44.2 billion US dollars. And we have not even touched on a very significant segment, which is monopolised by our competitors - the category of 400 seats and over." Pierson concluded, that gaining a share in the market was not just another lucrative project, but was about maintaining healthy competitiveness. Without it the number of suppliers was dwindling, the airlines would have to pay rising prices, which for economic reasons would then have to be passed on to the passengers. Without the pressure of global competition, technological progress would slow down. As a result the privilege of international aviation is going to become increasingly expensive. In order to counter this process, Airbus Industries is developing the A3XX. However, one must not forget the fact, that to complete the A3XX nine billion US dollars are needed. Pierson elaborates, "With this project everything must be just perfect. Our design team was unable to achieve their target of reducing operating costs by 15 per cent by the end of 1997. We have postponed this goal by nine months, and if we are unsuccessful again, we will postpone our target once more. We know that the A3XX is the most suitable plane for the airlines, and also that it will earn its operators and associated industries a lot of money. But a project of this size and technological significance must be perfect in all areas." The same also applies for the AE31X, which is going to be constructed in co-operation of Airbus Industries Asia, (a joint-venture between Airbus and the Italian firm Alenia), the Aviation Industries of China (AVIC) and Singapore Technologies (ST). However, in last few months there has been more and more doubt as to whether this plane will be profitable. According to Airbus managers, the necessary investment will bear no relation to the target price. A pre-development phase without ratification of a co-operation agreement and without participation of the Singapore partners has been started. There are still problems with AVIC regarding the amount of the technology transfer. It is the view of the Airbus partners that the Chinese partners are not primarily concerned with the construction of a plane, but in a high-level-technology-transfer. It seems that Boeing, in the beginning without a "regio-model", now is in a better position with the 717. It remains to be seen, how much the airlines will object to the over 30 year old airfoil, taken from the DC-9. But for 18 million US dollars, its designated price, you cannot even buy an Avro RJ. And that plane has got a host of other problems. But Airbus has, according to recent rumours, another trump card. The plane constructors based in Toulouse are said to be working on shortened version of the smallest Airbus, the A319, dubbed the A319M5. Part of the reason is the impending end of the Asian connection. Aerodynamics and the question of which engine to use need to be resolved. Airbus Industries might have their eye on the BMW Rolls-Royce BR715. BRR Boss Nittinger will be delighted. From page 20 of FLUG REVUE 5/98 Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 5/98 Copyright 1998 by Motor-Presse Stuttgart. All rights reserved. Last updated April 7, 1998 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany