Airbus to Seek Alliances as Rivals Try to Sell Big Planes

Airbus SAS (EAD), the world’s largest commercial planemaker, will try to forge ties with companies seeking to break into the market for large airliners because there isn’t enough room for six competitors, an executive said.

The manufacturer’s current strategy of “making life difficult” for aspiring entrants may evolve over time, said Frederic Pochet, Airbus vice business for development and cooperation.

Airbus, a Toulouse, France-based unit of European Aeronautic, Defence & Space Co., shares the market for large jetliners with Chicago-based Boeing Co. (BA) Commercial Aircraft Corp. of China, Montreal-based Bombardier Inc. and Russia’s OAO Irkut Corp. (IRKT) aspire to make single-aisle planes, which generally seat 125 to 200 passengers. Brazil’s Embraer (EMBR3) decided late last year not to push immediately into that market after Airbus and Boeing began offering new engines on single-aisle models.

“In the medium term, we also want to enter into a game of alliances, if it develops,” because there probably won’t be sufficient demand to support half a dozen companies, Pochet said today at a roundtable discussion at a conference in Paris. “We’re ready for that reshuffle if it takes place in several years.”

Commercial Aircraft, or Comac (CACOFZ), is working toward a 2014 deadline for the first flight of its C919, a plane that will carry about 168 passengers, and is exploring cooperation with Bombardier. (BBD/B)

Suppliers

Planemakers already share subcontractors to provide engines, avionics, landing gear and other parts. Pratt & Whitney, a unit of United Technologies Corp. (UTX), is providing geared turbofan engines to power Airbus’s A320neo, which comes out in 2015, and is also powering Bombardier’s planned Cseries, a 110- to 145-seat passenger jet set for first test flight by the end of this year.

Bombardier said in October that it was talking to Comac about how the two companies might share features between the two planes.

Irkut Corp., a Russian state-controlled aircraft maker, has said it is targeting a 10 percent share of the market for single-aisle planes as it aims to put a jet seating 150 to 212 passengers into service by 2017.

EADS assumes that a Chinese single-aisle plane will compete against Airbus outside China “around 2020,” said Marwan Lahoud, chief strategist for the aerospace company.

“There are too many players on this technology,” he said at the conference, organized by Les Echos newspaper. “Sooner or later, there will be some consolidation. One must properly pick one’s partners, and that’s what we’re working on.”

The basic duopoly of Airbus and Boeing “will still be here in 2020,” Lahoud said.

To contact the reporter on this story: Francois de Beaupuy at fdebeaupuy@bloomberg.net; Andrea Rothman at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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