Business

October 28, 2013

Airbus promotes its US links on Boeing’s turf

Joan Lowy
Associated Press

Airbus, headquartered in France, is pitching its value to the U.S. economy as it takes its battle for dominance in the global airplane market onto rival Boeing’s home turf.

Last week for the first time Airbus is holding its annual meeting with its suppliers from around the world in Washington instead of at home in Toulouse. It’s the company’s way of underscoring that 42 percent of its procurement spending – about $13 billion in 2012 – goes to U.S. companies.

Earlier this year, Airbus broke ground on a $600 million assembly plant for its popular A320 airliner in Mobile, Ala., the company’s first such facility in the U.S. A poster at the company’s offices only a few blocks from the White House promotes the A320 as made in America.

Airbus currently claims less than 20 percent of the U.S. commercial airplane market, but is aiming for 50 percent – roughly the same as its market share worldwide, Airbus CEO Fabrice Bregier said in an inteview Oct. 24.

There is room to maneuver to do better in the United States, he said. We care about this country, we have extremely good partners here, we are competitive and we want to grow with them.

Airbus is having some success with its campaign for the U.S. market, Bregier said, noting that Delta Air Lines and JetBlue have ordered A320s.

This is first of all because of the quality of the product, but also because we are seen as a U.S. citizen and assembling our aircraft here in the United States, he said.

Boeing officials, however, scoff at Airbus’ attempts to emphasize their value to the U.S. economy, noting that Boeing employees 160,000 workers across the country, about half of them involved in commercial airplanes and the rest mostly in the company’s defense business.

Their starting up of one very small plant in Mobile versus our 160,000 employees in the United States, it’s a significant difference, said John Wojick, senior vice president, global sales & marketing, for Boeing Commercial Airplanes.

Both companies draw on many of the same suppliers scattered all over the world. A significant portion of Boeing’s 787 parts, for example, are made in Japan. The company also has suppliers in Europe.
The U.S. is the world’s largest airplane market, but it is a mature market and not growing nearly as fast as Asia, Wojick said.

Boeing reclaimed the title of world’s largest airplane maker from Airbus last year, delivering 601 planes in 2012 to Airbus’ 588 deliveries. But earlier this month, Airbus secured its first ever order from Japan Airlines, a deal that undermines Boeing’s long-held dominance of the Japanese aviation market.

So far this year, Airbus has sold slightly more planes than Boeing, but both companies are having a very good year, Wojick said. Boeing will again deliver more planes this year than Airbus, he predicted.

Bregier said he anticipates Airbus will regain the lead on deliveries around 2017 or 2018, when the company ramps up production of the A350, a family of long-range, two-engine, wide-body jet airliners due to come into service next year.

The contest between the two aircraft makers is about a lot more than bragging rights. Boeing forecasts that over the next 20 years the global demand for new airplanes will exceed 35,000 aircraft valued at $4.8 trillion.

The two companies are also challenging each other in legal arenas. They are locked in an international trade dispute at the World Trade Organization in Geneva, each claiming that the other receives illegal state subsidies. AP




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