dolution

CASE STUDY
Airbus versus Boeing, Europe versus America

If you want rivalry and drama, you don ’ t need to watch a Shakespeare play. You can follow Airbus, the European manufacturer of passenger aircraft, and its competitor the American Boeing. The business media offer continuous deliveries of new episodes which not even the Merchant of Venice can top.
There are innumerable dimensions of the developments of Airbus ’ new and problem-ridden A380 superjumbo that seats 555 passengers in its standard version – but 853 could be packed in. It flies 14 800 kilometres non-stop.
Airbus and Boeing are in tight competition for aircraft orders; each has a market share of close to 50 per cent. During 2004, Airbus had the lead in new orders but Boeing passed Airbus in 2006 and 2007. While Airbus is running at a deficit, Boeing is making a profit. Both have a broad product range and together they can offer aircraft from 100 to over 500 seats. Airbus and Boeing are in tight competition for aircraft orders; each has a market share of close to 50 per cent. During 2004, Airbus had the lead in new orders but Boeing passed Airbus in 2006 and 2007. While Airbus is running at a deficit, Boeing is making a profit. Both have a broad product range and together they can offer aircraft from 100 to over 500 seats.
They simultaneously confront each other and try to position themselves as unique with models a bit smaller or a bit bigger than the other. The Airbus A380 is bigger than Boeing ’ s 747 jumbo jet. It is anticipated to reduce sales of the Boeing 747, gaining Airbus a growing market in very large aircraft.
Frequent delays in A380 deliveries – several years – have caused irritation among airlines. Media report that ‘ they have stopped yelling and just sit there and stare, speechless .
It has made many cancel orders and instead consider the refreshed Boeing 747-8. Airbus has also proposed the smaller A350 XWB to compete with the fast-selling and fuel-efficient Boeing 787 Dreamliner. Airbus planes in service are outnumbered by Boeing 4 times. What goes on in the sales negotiations we don ’ t know. But Airbus is owned and manufactured by several EU countries, among them France, Germany, the United Kingdom and Spain.
The US administration and EU leaders are in a fight, both sides claiming that the other benefits from illegal subsidies.
It is thus not only a market relationship but it has mega overtones and has spawned a political battle between Europe and America. The battle also spills over into the labour market where 50 000 jobs in Germany, France and the United Kingdom are dependent on Airbus success.