[edit] Boeing's Product Plan
Since the 1970s Boeing has faced increasing competition from Airbus, which has expanded its family of aircraft to the point where Airbus and Boeing now cover an almost identical market. Airbus has delivered more planes than Boeing every year from 2003 onwards. Airbus orders have exceeded Boeing's in every year since 1999 except for 2000 and 2006, which went to Boeing. In 2005 Airbus won more orders by number, but Boeing won 55% by value. In summary, of the last 10 years (2000–2009), Airbus won 6,452 orders while delivering 3,810, Boeing won 5,927 orders while delivering 3,950.
The
A320 has been selected by 222 operators (Dec. 2008), among these several
low-cost operators, gaining ground against the previously well established
737 in this sector; many full-service airlines also have selected it as a replacement for
727s and aging
737s, such as
United Airlines and
Lufthansa; and after 40 years the
A380 now challenges the
Boeing 747s dominance of the very large aircraft market. The
747-8 is a stretched and updated version of the venerable 747-400 and will offer greater capacity, fuel efficiency and longer range. Frequent delays to the
Airbus A380 program caused several customers to consider cancelling their orders in favour of the refreshed
747-8[30], although none has done so and some have even placed repeat orders for the A380. However, all A380F orders have been canceled. To date, Boeing has secured orders for 78 747-8F and 28 747-8I with first deliveries scheduled for 2010 and 2011 respectively, while Airbus has orders for 234 A380s, the first of which entered service in 2007.
Several Boeing projects were pursued and then canceled, like the
Sonic Cruiser, launched in 2001. Boeing is now focused on the
787 Dreamliner as a platform of total fleet rejuvenation, which uses technology from the Sonic Cruiser concept. Despite having been delayed by more than two years, the 787 is the fastest selling
wide body airliner in history. The 787's rapid sales success and pressure from potential customers forced Airbus to revise the design of its competing
A350.
In 2004, Boeing ended production of the
757 after 1055 were produced. More advanced, stretched versions of the 737 were beginning to compete against the 757, and the proposed
787-3 will fill some of the top end of the 757 market. Also that year, Boeing announced that the
717, the last civil aircraft to be designed by McDonnell Douglas, would cease production in 2006. The 767 was in danger of cancellation as well, with the 787 replacing it, but recent orders for the freighter version have extended the program and the uncertainty of the deliveries of the 787 also prolongs the deliverance. The passenger version of the
Boeing 747-400 ceased production on March 17, 2008. However, the freighter version will remain in production until the first delivery of the
747-8F.
Recently, Boeing launched five new variants of existing designs: the ultra-long-range
777-200LR, 737-900ER, 737-700ER, 777 Freighter and the 747-8. The 777-200LR has the longest range of any commercial aircraft and was designed to compete with the
Airbus A340-500. It was first delivered in 2006. The 737-900ER and 737-700ER are the extended range variants of the -900 and -700 models. Due to rising fuel costs, the more efficient
twinjet 777 has been winning orders at the expense of the four-engined
Airbus A340.
There are 5,417 (April 30, 2009) Airbus aircraft in service, with Airbus managing to win over 50 per cent of aircraft orders in recent years. Airbus products are outnumbered by in-service Boeings (there are about 4,495 Boeing 737s alone in service
[31], about 13,000 total
[32]).
[edit] Safety
Both aircraft manufacturers have good safety records on recently-manufactured aircraft. By convention, both companies tend to avoid safety comparisons when selling their aircraft to airlines. Most aircraft dominating the companies' aircraft sales, such as the
Boeing 737-NG and
Airbus A320 families (as well as both companies'
wide-body offerings) have good safety records as well. Older model aircraft such as the
Boeing 727,
Boeing 737 Original,
Boeing 747,
Airbus A300 and
Airbus A310, which were respectively first flown during the 1960s, 1970s, and 1980s, have had higher rates of fatal accidents.
[33]
[edit] Controversies
The
Boeing 787 (above) will compete with the
Airbus A330 and the
Airbus A350 on the medium to long range market.
[edit] Subsidies
Boeing has continually protested over launch aid in form of credits to Airbus, while Airbus has argued that Boeing receives illegal subsidies through military and research contracts and tax breaks.
In July 2004
Harry Stonecipher (then-Boeing
CEO) accused Airbus of abusing a 1992 bilateral EU-US agreement providing for disciplines for large civil aircraft support from governments. Airbus is given reimbursable launch investment (RLI, called "launch aid" by the US) from European governments with the money being paid back with interest, plus indefinite royalties if the aircraft is a commercial success
[34]. Airbus contends that this system is fully compliant with the 1992 agreement and
WTO rules. The agreement allows up to 33 per cent of the programme cost to be met through government loans which are to be fully repaid within 17 years with interest and royalties. These loans are held at a minimum interest rate equal to the cost of government borrowing plus 0.25%, which would be below market rates available to Airbus without government support
[35]. Airbus claims that since the signing of the EU-U.S. agreement in 1992, it has repaid European governments more than U.S.$6.7 billion and that this is 40% more than it has received.
Airbus argues that the
pork barrel military contracts awarded to Boeing (the second largest U.S. defense contractor) are in effect a form of subsidy (see the Boeing
KC-767/
EADS KC-45 military contracting controversy). The significant U.S. government support of technology development via
NASA also provides significant support to Boeing, as does the large tax breaks offered to Boeing which some claim are in violation of the 1992 agreement and
WTO rules. In its recent products such as the
787, Boeing has also been offered substantial support from local and state governments
[36]. However, Airbus' parent,
EADS, itself is a military contractor, and is paid to develop and build projects such as the
A400M transport and various other military aircraft.
[37]
In January 2005, the European Union and United States trade representatives,
Peter Mandelson and
Robert Zoellick (since replaced by
Rob Portman, and then
Susan Schwab, and the present office holder,
Ron Kirk) respectively, agreed to talks aimed at resolving the increasing tensions. These talks were not successful with the dispute becoming more acrimonious rather than approaching a settlement.
In September 2009, the
New York Times and
Wall Street Journal reported that the World Trade Organization would likely rule against Airbus on most, but not all, of Boeing's complaints; the practical effect of this ruling would likely be blunted by the large number of international partners engaged by both plane makers. as well as the expected delay of several years of appeals. For example, 35% of the
Boeing 787 is manufactured in
Japan. Thus, some experts are advocating a negotiated settlement.
[38] In addition, the heavy government subsidies offered automobile manufacturers in the United States have changed the political environment; the subsidies offered
Chrysler and
General Motors dwarf the amounts involved in the Airbus-Boeing dispute.
[39]
[edit] World Trade Organization litigation
"We remain united in our determination that this dispute shall not affect our cooperation on wider bilateral and multilateral trade issues. We have worked together well so far, and intend to continue to do so."
Joint EU-US statement
[40]
On 31 May 2005 the
United States filed a case against the
European Union for providing allegedly illegal subsidies to Airbus. Twenty-four hours later the European Union filed a complaint against the United States protesting support for Boeing.
[41]
Tensions increased by the support for the Airbus A380 have erupted into a potential trade war due to the upcoming launch of the Airbus A350. Airbus would ideally like the A350 programme to be launched with the help of state loans covering a third of the development costs although it has stated it will launch without these loans if required. The A350 will compete with Boeing's most successful project in recent years, the 787 Dreamliner. EU trade officials questioned the nature of the funding provided by NASA, the
Department of Defense, and in particular the form of R&D contracts that benefit Boeing; as well as funding from US states such as the State of Washington, Kansas, and Illinois, for the development and launch of Boeing aircraft, in particular the
787.
[42] An interim report of the
WTO investigation into the claims made by both sides was made in September 2009.
[43]
In March 2010, the WTO ruled that European governments unfairly financed Airbus.
[44]