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Boeing rejuvenated by midsize plane sales at Paris Air Show

LE BOURGET, France—This was supposed to have been a triumphant week for European jet builder Airbus, a moment to revel on home turf here at the Paris Air Show after years of besting American rival Boeing.

But it hasn't quite turned out that way, not even with Monday's well-timed announcement that Qatar Airways plans to buy 60 new Airbus midsize passenger jets.

Qatar may have chosen the still-in-development Airbus A350, but Chicago-based Boeing's new version of a midsize workhorse, the 787 Dreamliner, has been selling so briskly that it has reinvigorated the company almost overnight.

A decade ago, Boeing controlled 80 percent of the passenger-aircraft market.

But in 2003, Airbus surpassed Boeing for the first time in the number of planes delivered—305, compared with 281 for Boeing—and it beat Boeing again last year.

Before the Qatar announcement, Airbus had sold only 10 A350s, while Boeing says it has orders from 21 customers for a total of 266 Dreamliners, which will hit the market two years before the A350 does.

In fact, Airbus decided last week to hold off on formally launching the A350, which is the subject of a legal wrangle in the World Trade Organization between the United States and the European Union over government subsidies that each company accuses the other of receiving unfairly.

The Airbus-Boeing rivalry has captured imaginations at this year's air show, which French President Jacques Chirac opened Monday, because it pits not only two aviation giants but also competing visions of where air travel is headed.

Airbus has put most of its eggs—$13 billion worth—into the A380, a multi-deck colossus that seats as many as 555 passengers and is designed to fly between large cities under the current air-transport model, known as the "hub and spoke" system.

Boeing, by contrast, hasn't offered a replacement for its aging 747, which was long the dominant super-jumbo jet. Instead it set about developing the 223-seat 787, which is designed to fly fewer passengers long distances "point to point," as discount carriers Southwest and Jet Blue do. Boeing thinks passengers will demand that airlines move away from the hub system.

Airbus says it has 154 firm orders for the A380, which was announced in 2000 and is scheduled to be flying by 2006, mainly on long international flights.

But Boeing officials say they doubt the company can sell the 300 planes it needs to make a profit, and Airbus is facing manufacturing problems that recently forced it to delay delivery of the plane for six months.

A top Boeing executive brimmed with confidence Monday as he briefed journalists on the status of the 787, which is being assembled in Seattle.

Mike Bair, the Boeing vice president in charge of the Dreamliner, said Boeing had sold so many 787s that its factory was booked for the first two years of production and officials were contemplating expanding their targets.

"The marketplace would eat as many as we could produce, so we're just trying to figure out a prudent number," Bair said.

Airbus spokesman David Velupillai said the A350 would prove a formidable competitor to the Dreamliner, in contrast to Boeing's inability to compete with the A380.

"The question is why isn't Boeing in the super-jumbo market?"

At first, many analysts thought Boeing had made a big mistake by not matching the A380. But as airlines began to show a huge appetite for the 787, it was Airbus that scrambled to announce the A350, which it bills as a replacement for its A330. Each company says its new midsize plane will cost less to operate than existing planes.

Whoever's vision of air travel proves correct—analysts say there's room for both, since hubs will long be needed in places such as China and India—all the new planes are good news for passengers.

In the 787, for example, the air quality will be better because the composite materials used to make the fuselage are stronger than aluminum, allowing cabin pressure to be higher, Bair said. Boeing's research shows that passengers will have less eye and throat irritation as a result.

Customers will like that, but airlines like the 787 equally well for a different reason, Bair said: It's designed to be easier to strip down and sell if an airline hits hard times.

"It was not lost on us that we build a capital good for an industry that is struggling to make money," he said.

This year's air show is a return of sorts to normality. Two years ago, in what was seen as an attempt to punish France over its lobbying against the war in Iraq, the Pentagon essentially boycotted the show and encouraged U.S. defense contractors to follow suit.

This year both the U.S. military and American aerospace firms are back in force. Lockheed Martin, for example, is touting its two major programs, the F-35 Joint Strike Fighter and the F-22 Raptor, both being built in Fort Worth, Texas.

Indeed, just about every company associated with civil or military aviation has a presence on this exhibit grounds just north of Paris, where the major players have rented buildings to market their wares and entertain guests.

Organizers said the show had broken a record by drawing 1,900 exhibitors from 44 countries. More than 200 planes and helicopters are on display at the airfield where Charles Lindbergh landed in 1927 after the first solo nonstop transatlantic airplane flight.


(c) 2005, Knight Ridder/Tribune Information Services.

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ARCHIVE GRAPHIC on KRT Direct (from KRT Graphics, 202-383-6064): Boeingairbus

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