Editorial: This Too Will Pass, We Believe
By Perry Flint, Air Transport World | Jun. 26, 2006
We are not the first to suggest that at this stage in its evolution, the commercial air transport manufacturing industry appears to have become a zero sum affair, a game of seesaw in which one side has to sink down in order for the other to rise up. Thus as Airbus confronts a wave of bad news including extensive new A380 delivery delays and potentially harmful operating restrictions when the aircraft enters service, uncertainty regarding the A350, and slack sales across its product line (see NewsBriefs, p. 9, and Farnborough Preview, p. 120), perhaps it will find comfort in the knowledge that not so long ago the other fellow was the one catching the brickbats.
Following the collapse of the Sonic Cruiser concept, Boeing was attacked for letting its product line get stale, failing to develop new commercial programs and seeming to care more about Wall Street and its share price than its customers. "Lights out in Seattle" was a common refrain as Boeing wavered over a launch decision. We urged the company to heed its own history and go forward with what was then called the 7E7 (ATW, 12/03, p. 5). Boeing did, and after a slow start has unleashed a winner that has grabbed more than 360 firm orders two years before the first one enters service.
Now it is the turn of Airbus. Certainly it must solve its production problems on the A380, get the airplane into service and persuade ICAO to ease its proposed operating restrictions. It is unfortunate that the problems with the A380 quickly degenerated into unprofessional and destructive finger-pointing between EADS and Airbus and that customers appear to have been left in the dark as production problems escalated.
Nevertheless, without downplaying the huge tasks ahead, we believe these difficulties eventually will sort themselves out and the aircraft will live up to its promise. As Edmund Greenslet has pointed out, the 747 was a disaster for Boeing in its first 10 years. The fate of the A380 won't be known for at least another decade. Airbus needs to stay the course and EADS needs to provide support, not become the European version of a Wall Street stock price watcher.
Long-term, the bigger issue is what to do about the A350 (or A370 as it soon may be called), and here Airbus is on unfamiliar ground. Simply put, until now it has not had to confront the imminent obsolescence of an aircraft family or product line. True, the A300 and A310 are nearing the ends of their useful livesas passenger jetsbut Airbus never did get around to developing a suitable successor despite the wishes of some customers. Perhaps it did not feel the need to do so because wherever it looked it saw green fields to explore. It was still in the process of developing a family of products (how often was that phrase heard in Toulouse during the 1980s and 1990s?) and the day of reckoning that Boeing faced with the 727 and 737 Classic programs appeared to be well into the future.
Unfortunately, it arrived much sooner than Airbus thought, driven by soaring fuel costs that have severely injured the relatively young four-engine transports forming the core of its long-haul product line and Boeing's need to do something about its dwindling 767 sales.
Airbus has admitted that it underestimated the market appeal of the 787. Now it finds itself in the unfamiliar position of having to come up with a successor aircraft that must do the job cheaper and provide more capability than the airplanes it currently sells. For a company that historically has seemed to tailor its designs to specific missions and roles, this has to be unsettling. It is also unnerving to be in the "me-too" position and playing catch-up.
Clearly the A350 as it was presented last year did not stir the market's imagination. Does Airbus continue along the same path anyway? Does it turn away from its long-held goal of parity and settle for the 30% share analysts see the airplane getting? That does not sound like the Airbus of old nor does it sound like a strategy for long-term success. Airbus needs to go back to the drawing board, but before it emerges with a new design, it needs to figure out why it is building this airplane and what markets it will serve. After that, our advice is the same we gave to Boeing: Build it and they will come.