As plane deals go, this could well be the biggest prize in recent memory. In December, three major Asia-Pacific carriers are expected to place orders for more than 100 widebody jets worth an estimated $16.8 billion. And by the looks of things, Boeing looks poised to supply most of the planes.

Pictures, left: Boeing 777, below: Boeing 787, built with high tech composites.

 

Asia-Pacific has always been the key market for both jetmakers. It has the fastest growth, and it buys the biggest airplanes that generate the most profit. Boeing has hung onto Asia-Pacific even though Airbus eroded its market share in nearly every other region. Even today, Boeing controls nearly 60% of the Asian widebody market -- thanks to its 747 Jumbo jet, long favored by regional carriers for its ability to fly immense distances and seat 415 people, and rising sales of the 777.

Airbus had aimed to supplant the 747 with its 555-seat A380 mega carrier. But as early as 1999, Boeing execs determined -- correctly as it turned out -- that the market was changing. They predicted passengers would prefer to fly nonstop rather than fly through a hub and switch from a big jet to a smaller one. Filling that demand, Boeing figured, would require fleets of smaller, twin-engine planes rather than Airbus' four-engine A340.

At first, some Asian carriers were hesitant about flying immense distances over oceans on two engines. The fear was that if one engine quit, they wouldn't have enough range to make an emergency landing. But during the 1990s, the 777 proved that it could fly long distances with few engine problems. And before long, Asia-Pacific carriers began buying larger versions of the plane that seated more people and flew farther.

"Operationally, the 777 is a brilliant machine," says Tim Clark, president of Emirates Airlines, which operates Boeing and Airbus aircraft. "She flies fast. She flies high. She has extremely good economics."

THRIFTY ON FUEL. Indeed, Boeing's move to twin-engine planes couldn't have come at a better time. Rising fuel prices have prompted carriers to seek out more efficient jets -- and two engines are a whole lot cheaper to operate than four. The 777 burns about 24% less fuel per seat-mile than Airbus' four-engine A340.

That's a huge difference, and some airlines flying A340s -- such as Air Canada, Austrian Airlines, Singapore, and possibly Qatar -- are looking to replace them with 777s. It's easy to see why there's a backlog of 189 orders for the 777 vs. only 79 for the A340. "You don't need four engines anymore," says Edmund S. Greenslet, editor of The Airline Monitor. "The A340 is going the way of the dinosaur."

Boeing flew its two-engine strategy into the stratosphere when it launched the lightweight, carbon-fiber-based 787 Dreamliner. This new twin-engine jetliner, which will seat between 214 to 250 passengers, will be able to fly nonstop from Los Angeles to Sydney and burn 20% less fuel than existing similar-size twin-engine jetliners. The Dreamliner, so far, has chalked up 293 firm orders and commitments from 24 customers, compared with 143 orders and commitments for Airbus' new, lighter A350.

AHEAD OF ITS TIME? Airbus isn't out of the game by any means. While the A380 may not be a financial success in the near term, it will probably follow the same history as Boeing's 747 and score big in another decade. "It's too early to judge the success of the A380," says Greenslet. "What's clear is that it's not going to be a profit center for them until 2020, but that doesn't mean there won't be a demand for a big airplane eventually."

What's more pressing for Airbus now is defending the markets for medium and large passenger jets. Much will depend on which way Singapore, Qantas, and Cathay decide to fly.

 

Nickname: Columbia107
Review: Utter nonsense that Air India opted for a Boeing order as a result of Miss Rice's visit to Delhi. Airbus were beaten fair and square on the basis of fuel efficient aircraft. In the case of the 777 based on a proven track record i.e. 20% less than its Airbus competitor. And that is a fact.
Date reviewed: Oct 28, 2005

Nickname: Anton
Review: A bad year for Airbus? You gotta be kidding!! Guess you forgot the Paris Air Show (June 2005!) with 279 planes sold. Historic first flight of the A380 etc. Do your homework better next time!
Date reviewed: Oct 28, 2005

Nickname: Michael
Review: Many have said that Airbus has had an unfair advantage in having government aid. The reality is that Boeing may have had assistance in government projects, they had much less assistance on the commercial side, so they have to win customers by designing an airplane that meets the customers needs and having a support network that focuses on the operators. They've been listening to the customer, so for now, they win.
Date reviewed: Oct 28, 2005

Nickname: Papitou
Review: At this point it is too early to conclude that Boeing got the deal game since the world's economy is still trying to find an answer to the rising energy cost. Once things get clearer, we will get different comments from analysts about this subject. Let not overreact and draw early conclusions. We are still gambling...!!!!
Date reviewed: Oct 28, 2005

Source: BusinessWeek, November 7, 2005

Your job
1) Write a German summary.

2) When was the 747 Jumbo Jet first flown and why is it such a success?

3) Outline the history of Boeing and Airbus.

4) What do you think of Boeing's 'two-engine-philosophy'?

5) Why were airlines reluctant to fly two-engine airliners long distances over oceans?

6) Why does Boeing use carbon composites to build the 787?

7) Who is Mrs Rice, mentioned in a reader's comment?

8) Consider the reader comments. Try to find proof for each comment in the Internet.