Airbus, Boeing Bet on Future of Air Travel

ByABC News
January 17, 2005, 8:05 AM

TOULOUSE, France, Jan. 17, 2005 — -- On Tuesday, in an airplane factory the size of 15 football fields, leaders of four European countries will watch as a curtain drops, revealing the first A-380, the super jumbo jetliner Airbus is betting $12 billion will give it an insurmountable lead in the race with Boeing to become the world's leading commercial jetliner manufacturer.

The A-380 is the biggest passenger airliner ever built. It is designed to hold 555 passengers in three classes of service and fly farther, at a lower cost for airlines, than the current biggest plane, Boeing's 747. With an 80-meter (262.5-foot) wingspan, it has an upper deck stretching the length of the plane and a cavernous interior with the promise of more room for passengers.

"The 747 was the flagship of the 20th century," says John Leahy, the American who is in charge of sales and marketing for the European company founded and financed by Britain, France, Germany and Spain.

"In the 21st century," Leahy says, "people will seek out the A-380 if it's on a route, because it's bigger and more comfortable. They'll enjoy flying more."

Thirty-five years ago, when Boeing introduced the 747 in Seattle, the 350-passenger plane that was the first jumbo jet redefined air travel. It gave Boeing a competitive edge no one successfully challenged, until now.

"The A-380 really has no competition right now," says Leahy, who believes it will become a cash cow for Airbus, just like the 747 became a "cash cow for Boeing -- the one aircraft that they really made money with because it had no competition."

But Boeing hasn't sold a 747 passenger plane for two years. And for two years Airbus has done the unthinkable -- selling more planes than Boeing to become the market leader. In 1999, the peak of world commercial aircraft production, Boeing had 117,000 employees who delivered 620 airplanes. Airbus delivered 294 that year. Last year, Boeing had fewer than 53,000 employees who delivered just 285 planes. Airbus delivered 320.

Many of Boeing's problems, its executives say, can be traced to Sept. 11. The collapse of air travel then hurt it more than Airbus.

"We dropped our production rates in half after the tragic events," says Randy Baseler, vice president of Boeing's commercial airplane group. "And we are now starting to rebuild our production rates slowly as we see this gradual recovery" in air travel.