Airbus Has A Bad Case Of Jet Lag
Plastics. They really are the future. More precisely, the carbon-fiber-reinforced plastics known as composites are reshaping the rivalry between Airbus and Boeing Co. (BA ), and the European planemaker has a lot of catching up to do.
With oil prices soaring, airlines are flocking to Boeing's new 787 Dreamliner, which promises to burn 20% less fuel than conventional planes. The 787 is made mostly of composites, which weigh half as much as aluminum, but are stronger so that wings and other parts can be made slimmer and more aerodynamic. Airbus is countering with the A350, a planned aircraft with one-third less composite content than the 787. But most carriers are snubbing it. Small wonder, then, that Airbus Chief Executive Gustav Humbert confirmed at the Berlin Air Show on May 17 that the company will unveil a revamped design for the A350 by July. "The game is not over," he said.
Seems like it should be a cinch for Airbus to up its composite content in a new A350. The company has been building composite parts since the 1980s. The expected $10 billion price shouldn't be a problem, either. Airbus has already overtaken Boeing as the world's top jetmaker. Its parent, European Aeronautic Defence and Space Co. (EADS), on May 16 reported first-quarter profits up 26%, to $665 million, on sales up 30%, to $11.7 billion.
But Boeing has a big head start. True, Airbus had been a pacesetter when it introduced composites on tail stabilizers. But Boeing has since leaped ahead with its work on military contracts such as the B-2 bomber and its use of composites on civilian jets such as the 777. Airbus' much smaller composites program lags Boeing's on almost every front, from design to manufacturing to multiyear supply deals for carbon fiber. "All Airbus' engineers and all their factories are working in aluminum," says Andrew Walker, a former top Airbus engineer who now teaches in the materials program at the University of Manchester.
To close the gap with Boeing, Airbus will pour $580 million into research over the next few years. "Their lead will not be for long," says Airbus' Humbert. But Airbus can't get an all-composite plane into service before 2012, four years after the 787. Even then, most industry experts say it's unlikely the Airbus plane would be significantly better than the 787. "It's four years too late with a me-too airplane," crows Randy Baseler, Boeing's vice-president for marketing.
Airbus has plenty of talented engineers, but they're stretched thin. They're wrapping up work on the A380 megaplane, set to enter service at the end of this year, while also developing a new military-transport plane and an air- refueling tanker aircraft. Overall, Airbus spent $2.1 billion on research and development last year, only slightly below 2003, when A380 spending peaked.
The upshot: while Airbus gets up to speed on composites, Boeing will take an early lead, with 6 or 7 of its 787 Dreamliners rolling out of the factory each month at a list price of $120 million a pop. That gives Boeing plenty of time and money to launch its next plane, most likely an all-composite makeover of the 737. Such a plane would take direct aim at Airbus' best-seller, the A320, throwing the European company on the defensive once again.
Boeing could still stumble. Some 70% of production work on the 787 has been farmed out to contractors worldwide. Even minor glitches could delay the launch. Airbus also knows airlines will keep steering orders its way to prevent Boeing from gaining market dominance. "They don't want to be subject to higher prices," says George Hamlin, the head of Hamlin Transportation Consulting in Fairfax, Va.
The Europeans say they're up to the challenge. "Airbus has a history of successfully managing a steep ramp-up," Humbert says. Indeed, for most of Airbus' 36-year history, its newer aircraft designs and more modern factories gave it an edge over its older U.S. rival. But now, Boeing looks set to invade that comfort zone.
By Carol Matlack, with William Boston in Berlin and Stanley Holmes in Seattle