A Glass Jaw?

It's amazing how things can change in just a few months. When I was leaving for the wilderness, everyone had Boeing on the ropes, on one knee, with its trainer in tears. There were a few who pointed out the big manufacturer's advantages: better capitalization; a virtually endless larder of military contracts; the fact that their planes still did what they did quite well even after ten or twenty years. For the most part, though, the air transport business was jumping up and down like a JV Cheerleader team: Go Go Airbus!

As it turned out, a lot of the statistics we got on the new generation of Airbus planes look like they came from an aeronautical branch of Arthur Anderson. Everything from cabin to burn. Just google Airbus to read the dirge for the "Airbus Century". Cancellations include Austrian, JAL, TAM, Emirates (ouch), Qantas, Virgin, and God knows who else as EADS picks out the dirt. Doubtless one of the chief problems lay in selling a very large aircraft that had not quite been put through all its paces. Once you sell you are locked in, which means, well, that there's a very strong incentive to overlook problems with the aircraft. Which means that investigators from Emirates will be visiting your facility shortly. And then, lawyers.

Another long term problem that the company is experiencing is its market. The LCC carriers are tying down their growth as they truly discover what "low-cost" means (and as the CRS advantage fades, with better data sharing among legacy carriers). It means bigger problems for Airbus than for the older Boeing, which can still make a fortune just selling parts for its flying fossils. The China market for Airbus is proving to be, well, a China market- which means you do your business their way, or you can not do business at all. If it's anything like the Chinese and Indian software companies, they'll buy one aircraft, reverse-engineer it and sell it for the price of a used Lexus.

I won't join in on the cat-calling of Airbus yet. Sure, they'll have some growth problems, and it's possible the bigger LCCs might disintegrate or be absorbed by the end of the decade. But we don't know what the hell Boeing is doing right now. Airbus has some great, great logistical advantages for any carrier, and a lot of fantastic features and ideas. What's the reigning heavyweight going to do now that he's found his quick competitor has a glass jaw? I have a funny feeling they'll just send more teams down to Washington, to send more no-bid contracts their way.