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Boeing, Airbus battle intensifies in boom year

20-Dec-2005

SAN FRANCISCO (XFNews) - Just because Boeing Co. and arch rival Airbus are both having a banner year doesn't mean their rivalry is any less fierce.

For Boeing , the stakes keep rising along with its shares. The stock, a component of the Dow Jones Industrial Average, hit an all-time high last week on the strength of its boom in orders for passenger planes.

"They would do anything in their power to hurt the other," said Darryl Jenkins, an airline industry consultant.

It's as much a competition between continents as it is boardroom against boardroom, where a ceremony for a big airplane order may find executives rubbing elbows with heads of state.

While vying for customers with workhorse jets like the 737 and the A320, both companies are locked in a new level of competition to find buyers for their next-generation planes.

Boeing is working on its 787 Dreamliner and an even bigger version of the 747 jumbo jet.

At the same time, European-owned Airbus is going to out-jumbo the 747 with the A380. The largest passenger plane ever made will boast seating capacity for 800 people. Airbus, based in Toulouse, France, is also marketing a plane built with new-age composite materials in its wings, which is intended to give airlines interested in Boeing's 787 second thoughts.

But orders for Boeing's 787 have helped make the difference this year. The final tally for the year won't be clear until the close of 2005.

Through November, Boeing had 827 orders for 2005 while Airbus had 687 orders, according to their Web sites.

More orders can be expected in the coming weeks as deals from earlier in the year are finalized and made official.

Overseas markets are the prize right now as big deals with expanding airlines in Europe, China, the Mideast and India show.

After such strong demand abroad, the key to another successful year may lie closer to home.

"I think '06 might hinge on U.S. airlines," said Matt Collins, an analyst at Edward Jones. "I think that's what it's going to take to make '06 as strong as '05."

And after decades of fighting over airline contracts, there's a new American front for the two rivals.

Beyond 2005, Airbus' parent European Aeronautic Defence and Space Co. is now vying for a big defense deal on Boeing's home turf.

The contract to supply the U.S. Air Force's next air-to-air refueling tanker, which once looked to be in Boeing's hands before an ethics scandal scotched the deal, is a prize for the European contractor.

To help win the work, EADS is even planning to assemble the plane within the U.S.

"That," said Collins, "will sort of put a new twist on the rivalry as Airbus goes after the tanker order."


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