The Airbus A380 superjumbo.Airbus
- Over the past 20 years, the commercial aviation industry has come to be dominated by Airbus and Boeing.
- Airbus and Boeing each own roughly 50% of the global commercial airliner market.
- Airbus is relatively new when compared to Boeing. While Boeing has been around since 1916, the Airbus consortium did not come together until 1970.
- Airbus currently boasts a production backlog of around 7,500 planes while Boeing’s backlog is around 5,900 aircraft.
Airbus versus Boeing is one of the great rivalries in business today. On par with the likes of Coke versus Pepsi or Ford versus GM.
However, it wasn’t always this way. Not that long ago, the world of commercial aviation was filled with names like McDonnell Douglas, BAe, Saab, Lockheed, Fokker, and even Convair.
But these days, if you fly, it’ll probably be either an Airbus or a Boeing.
Boeing is the elder statesman of the two. Founded in 1916, the Boeing Company is now an aerospace and defense juggernaut that is America’s largest industrial exporter.
The company we know today as Airbus can trace its history back to an agreement signed in July 1967 by the French, German, and British governments to strengthen their cooperation in the field of aviation technology.
Included in the agreement is a clause that called for the governments to “to take appropriate measures for the joint development and production of an airbus.”
It was a decision made out of necessity, Richard Aboulafia, an aviation industry analyst for the consulting company Teal Group, told Business Insider.
At the time, American firms like Boeing, McDonnell Douglas, and Lockheed were growing in strength and influence around the world. European manufacturers, once commercial aviation’s leaders in innovation, were feeling the pinch.
Together they formed a consortium called Airbus to counter the might of America’s aviation giants.
The consortium would be based at the headquarters of Sud Aviation in Toulouse, France where it remains today.
Here’s a closer look at how Airbus became Boeing’s greatest rival:
The Europeans needed a wide-body jet of their own. On May 29, 1969, the French and German governments agreed to lead a consortium that would produce and sell the A300B airliner.
The development of Airbus as a company and the A300 as an airplane was fraught with challenges.
First, there was the issue of engines. Airbus struggled to find a suitable engine for the plane. Rolls-Royce’s new RB211 triple-spool turbofan engine was expected to be able to deliver the performance capable of powering the new 300 seat jet. So Airbus planned to use a version of the Rolls-Royce engine called the RB207. But, that deal fell through, leaving the A300 with no engines.
Instead, Airbus decided to buy off-the-shelf engines from GE and Pratt & Whitney after it scaled the A300 down from 300 seats to 250 seats. This occurred after Airbus realized that its plane may be too big for the European market due to lower airline demand forecasts.
In late 1968, the structure of the consortium took a major shift when the British government decided to pull its support in the wake of the massive cost overruns associated with the Concorde program. But, British manufacturer Hawker Siddeley remained in the consortium to build the A300’s wings.
On December 18, 1970, Airbus Industrie was officially created.
From the very beginning, the consortium agreed to build the A300 using parts from its various European members. To transport the various components to the assembly plant, Airbus used trucks, barges, and a fleet of over-sized transport planes called Super Guppys.
It was decided that France would build the cockpit, control systems, and the lower center section of the fuselage. While the Germans would be responsible for the forward, rear, and upper center sections of the fuselage. Britain’s Hawker Siddeley built the wings.
The Dutch would make the control surfaces while Spain’s CASA, a late addition to the consortium in 1971, constructed the A300’s horizontal tailplane.
Leahy is known for his bold and daring sales campaigns. Often gunning for and successfully winning over even Boeing’s most loyal customers. By the time Leahy retired this January, he had helped Airbus sell more than $1 trillion worth of jets.
In an interview with the Seattle Times, Leahy recounted how he got Northwest Airlines, a loyal Boeing customer, to buy Airbus in 1986.
Leahy went with a strategy called “Buy small, think big” in which he told Northwest it could order just 10 A320s but receive the bulk discount of a 100 plane order. However, Leahy also told Northwest it would reserve delivery dates for 100 planes in case it wanted more.
And if Northwest didn’t like the A320s, it’s simply stuck with 10 planes while Airbus absorbs the risk for the rest.
The strategy worked. Northwest really liked the Airbus.
“They didn’t just take 100, I think they got up to 145,” Leahy told the Times.
… The twin-engine A330 took to the air in 1992. The A340, launched at the end of the four-engine era, proved to be a commercial failure with just 377 sold. On the other hand, the A330 remains the company’s best selling widebody jet with more than 1,700 ordered so far.
Reuters/Jean Philippe Arles
The A330 and the A340 are comparable in size. However, the A330 was designed for medium to long-haul flights while the A340 was designed for long and ultra-long-haul flying. But with increasingly capable modern turbofan engines, the less-expensive to operate A330 could effectively operate most of the A340’s routes, rendering the latter obsolete.
