Business Blog: Hoover’s Business Insight Zone

There are more than two important players in the game of making airliners, as Bombardier and Embraer would be quick to point out, but the table with the highest stakes seats only two players: Airbus and Boeing. For a long time Boeing was the highest of the high rollers, drawing on decades of commercial and military aircraft expertise to supply the world’s airlines with planes from its legendary 7X7 lines — the 777, Southwest’s beloved 737, and the flagship intercontinental 747. Airbus, meanwhile, looked like a recipe for mediocrity, not least because it is owned by the multinational consortium EADS, which was formed from the conglomeration of German, French, and Spanish aerospace companies and which is still owned in part by the governments of Spain and France.

Yet somehow, too many cooks did not spoil the broth for Airbus, and in the early part of this decade the company took Boeing’s long-held crown as the world’s top maker of commercial aircraft. While Boeing went through substantial restructuring, Airbus booked more orders and delivered more planes year after year. Eventually, though, production problems caught up with Airbus, which announced delays and then more delays for both the mammoth A380 jetliner and its smaller cousin the A350. Thanks to these production glitches, plus occasional friction between Airbus and EADS leaders, Airbus has had three different CEOs in the past two years. Worse, it has lost previously firm orders for aircraft to Boeing. For example, big Airbus customers like FedEx and UPS have canceled orders for the cargo version of the A380, citing unreliable delivery schedules. Boeing has snapped up these orders and others with its popular new 787 “Dreamliner” and its 747 “Dreamlifter” cargo plane. The ray of hope for Airbus? Its first finished A380, which at long last enters service for Singapore Airlines on October 15.

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* This article first appeared on our Company of the Day page on 21 August 2007.