7E7 may push Boeing past Airbus in 5 years

  • Tuesday, January 18, 2005 9:00pm
  • Business

Airbus on Tuesday rolled out the world’s largest airliner. A week ago, it announced that it not only sold more airplanes than the Boeing Co. in 2004, it had also built and delivered more planes.

Boeing, on the other hand, missed its goal of selling 200 7E7s in 2004, spent most of last year mired in defense contracting scandals, and last week announced it would shut down its slow-selling 717 program.

Airbus rules the skies. The only question is how long it will hold that crown.

“That’s a good question,” said Teal Group analyst Richard Aboulafia. “There are reasons to believe that 2005 could see the tide turn for Boeing.”

Boeing has been sharply criticized in the European press this week – and not just by heads of state looking to indulge in a little payback for U.S. Defense Secretary Donald Rumsfeld’s “old Europe” cracks prior to the start of the Iraq war.

“Boeing has struggled with the development work needed to take the company into the 21st century,” Tim Clark, president of Emirates airline, told the Financial Times of London.

Emirates is gung-ho about the A380 and has ordered 45 of them. Yet, it also flies the Boeing 777, which is a “brilliant” airplane, Clark told the newspaper.

“But he has reservations about the rest of the U.S. group’s range,” Financial Times reported. Clark said. Airbus “has been braver, more brazen, more prepared to push the boat out.”

Boeing, on the other hand “was more concerned about shareholder returns,” Clark said. “It lost its bravery about developing new lines.”

Aboualfia agreed. Boeing is “paying the price for a long product-development vacation,” he said.

But not all is well in Toulouse.

The A380 is a huge gamble, the British Broadcasting Corp. reported. Only 14 airlines have placed orders for the A380, which is so big it will only be able to land at about 50 airports.

“If all goes to plan, the A380 may kill the 747 jumbo and become a must-have for airlines on long routes,” BBC continued. But at the same time, “airlines may find it hard to fill, and therefore not the cost-saver they are hoping for.”

“There are real concerns that rather than being a giant luxury transporter that brings greater comforts to customers, the A380 might be used as a ‘cattle-class’ transporter for the masses by airlines struggling to recoup their costs.”

Airbus will rule the roost until the end of the decade, analyst Paul Nesbit, with JSA Research in Rhode Island, said Tuesday. But look for Boeing to come back with a vengeance.

Boeing is poised to win major 7E7 deals from Qatar and China, Nesbit said. Those will give Boeing the 200 Dreamliner orders it’s been talking about, and could allow it to top Airbus in sales this year.

Airbus will likely continue to deliver more planes than Boeing for the next couple of years, Nesbit said. But once Boeing gets the 7E7 line in full production around 2010, Boeing will surge ahead once again.

“Boeing’s on the right track with this,” Nesbit said.

Aboulafia said Airbus’ future rests less on the A380 and more on the A350 – the 250-seat jet it proposes as a counter to Boeing’s 7E7.

Airbus originally proposed it as a quick-and-dirty overhaul of its A330 aircraft, and it was successful in blunting the momentum of Boeing’s 7E7 sales.

But now it appears that the A350 might not be good enough to steal away any 7E7 orders, he said.

“Boeing could get two-thirds of a very promising market,” Aboulafia said. “That’s the basis for a comeback. “

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.

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