Boeing goes on offense for midsize market
Trade suit on EU subsidies to rival Airbus raises stakes
Wednesday, June 15, 2005
By MARK LANDLER AND ELIZABETH BECKER
THE NEW YORK TIMES
LE BOURGET, France — When the Airbus A380 superjumbo jet took to the skies at the Paris Air Show, executives from The Boeing Co. crowded an observation deck here to gawk at the plane, the new flagship of a European company that is embroiled in a trade battle with Boeing.
As the A380 traced swooping circles above the airfield Monday, the Boeing delegation was plainly impressed. But after the giant plane touched down, the spell was broken. “Look for the dent in the runway,” one of the executives said in a dig at the A380’s chronic weight problems.
Boeing can afford a few wisecracks. After several years in which the company seemed in danger of being flattened by the Airbus juggernaut, it has stormed back into contention. Boeing’s new midsize plane, the 787, is selling briskly, while Airbus has been dogged by production problems with the A380 and questions about how it will finance its next new planes, particularly the A350, which is intended to go head-to-head with the 787.
The reversal of fortune comes just as the European Union is fighting a trade suit brought by the United States on aircraft subsidies.
“Boeing’s original strategy was purely defensive: to protect the 787 program,” said Richard Aboulafia, vice president of research at the Teal Group, an aerospace consulting firm in Fairfax, Va. “Now, it’s switched from defense to offense. They want to disrupt the A350.”
The stakes are enormous. Medium-size planes — those with 200 to 300 seats — will generate more revenue than any other category in the next two decades, according to industry forecasts. The segment is also one in which Airbus has chipped away at Boeing’s franchise, with its popular A330.
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