Boeing is back in play

After a year of adulation, Airbus is suddenly facing a run for its money. As the Dubai airshow came to an end last week, there was plenty to smile about: Dubai can be proud of staging such a fantastic event, while both Boeing and Airbus executives left the show with a considerable number of new plane orders in their briefcases. But as we have seen in the past, there is usually only one winner in aviation. Will it be Boeing or Airbus?

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By  Richard Agnew Published  November 27, 2005

|~||~||~|After a year of adulation, Airbus is suddenly facing a run for its money. As the Dubai airshow came to an end last week, there was plenty to smile about: Dubai can be proud of staging such a fantastic event, while both Boeing and Airbus executives left the show with a considerable number of new plane orders in their briefcases. But as we have seen in the past, there is usually only one winner in aviation. Will it be Boeing or Airbus? Having seemingly dominated the industry, or at least the media in the past year, Airbus is running into a spot of bother. Sure, it left Dubai with 65 new plane orders. And the magnificent superjumbo A380 stole the show, with its flypast over the Burj Al Arab. The question of course, is when will the planes actually be delivered. Emirates Airline, Singapore Airlines, Virgin Atlantic and Qantas are all big customers, but all face potential headaches. The man credited with the revival at Airbus, Noël Forgeard, tells us in this issue that claims of delays have been greatly exaggerated. Maybe so, but what about the financial claims that Airbus may face from unhappy customers? To add to his woes, Boeing is back in the boxing ring. Just a year ago it was riddled with scandal, including the loss of its chief executive, not to mention the fall out from a past financial scandal in the US. By the time the show ended, Boeing executives had orders for US$17 billion worth of planes and Emirates Airline had signed up for 42 of the new Boeing 777 planes. Boeing says that air traffic in the Middle East region will expand at a rate of 5.5% annually, and right now, it is Boeing that is best placed to take advantage of that growth. Its new Boeing 777-200LR, of which Emirates Airline has bought ten, recently broke the distance record for a commercial flight, travelling non-stop between Hong Kong and London (flying eastwards). In other words, Boeing is banking on customers preferring single long distance travel at reasonable comfort than interupted travel at extreme luxury. Only time will tell what the customer really wants. The trouble for Airbus is that with continued delays, it may be some time yet before the customer gets to choose.||**||Road block for GM|~||~||~|The massive job losses announced last week at American car giant General Motors should not be such a great shock. Of the 30,000 cuts, 25,000 were already expected. And at least six of the nine car plants that are closing knew the worst was coming. What is shocking is the decline of what was once the world's greatest car maker. GM's annual operational expenses are now running at US$41 billion. To compete with the likes of Toyota, Honda the company needs to cut costs by US$7 billion a year. So far this year, the company's losses amount to a staggering US$4.8 billion. Production costs are mounting, and sales are falling. And time is running out for GM. It simply cannot compete with the more efficient Asian car makers. Nor does it even know how to. In marketing, distribution and financing, again GM finds itself trailing behind its Asian rivals. For the 30,000 GM workers losing their jobs, the future is bleak. For those who remain, it may be even bleaker.||**||IOC deserves full praise|~||~||~|The International Olympic Committee is usually the subject of endless criticism. In the past, the IOC has been an easy target, and most of its troubles are self-made. But this week, it deserves applause. As we report, the IOC and the Qatar government have teamed up to set up a joint venture which will give under-privileged children from emerging nations the chance to play sports. Qatar is creating a high-tech Academy of Sports Excellence, which will award scholarships to hundreds of children from developing nations. Aspire is part of the US$1 billion Sports City being built outside Doha, which will host the 2006 Asian Games. The concept is unique, and has been supported in public by the likes of Pele, Maradona and Ed Moses. It is a venture that the IOC should repeat around other cash-rich states, and one that we applaud loudly.||**||

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