It's Boeing Vs. Airbus At Paris Air Show

Trans-Atlantic Competition Plays Out On Aviations Biggest Stage

(AP)  The world's biggest air show is bigger than ever this year but the main story hasn't changed: trans-Atlantic rivalry between Boeing Co. and Airbus will again dominate the 47th Paris Air Show which opens Monday at Le Bourget, north of the French capital.

In contrast to the last Paris show in 2005 when Airbus shone, this year the European plane-maker will be struggling to regain ground from its American rival.

"The show falls at a good point in the cycle for the airline industry," said Pierre Boucheny, an analyst with Kepler Equities in Paris. "Plane orders are increasing on the back of global economic growth. That might help Airbus catch up a little with Boeing."

After two years in the red, the commercial airline industry will make a profit of just over $5 billion this year, despite rising fuel costs, says the International Air Transport Association, whose 250 members claim to represent 94 percent of international air traffic.

Le Bourget's anticipated success shows the airline industry is in "globally good shape," said Charles Edelstenne, president of French aerospace industry group GIFAS at a presentation of the show earlier this month.

Airbus and Boeing will be fighting over high-profile orders. Airlines often reserve big announcements for the weeklong fair to ensure maximum impact.

At the 2005 show, Airbus announced orders worth $33.5 billion, double Boeing's $15 billion, based on list prices which are usually discounted for the deals.

"Since the last show, Boeing has got well back into the game," said Christophe Quarante, a Natexis Bleichroeder analyst in Paris.

Two years have made a huge difference to both companies' fortunes. Boeing reclaimed the top sales spot in 2006, winning more orders than Airbus for the first time since 2000 after the introduction of a hot new plane — the 787 Dreamliner — and a revamped sales team that was freed to offer discounts.

Confidence began returning to the American plane maker after upheavals in 2004 and 2005 which saw the removal of two top executives and defense contracting scandals that sent two other senior officials to prison.

Meanwhile, Airbus' management began to attract negative attention. A series of increasingly worrying announcements beginning June 2005 revealed missteps, technical setbacks, communication failures and a financial improprieties that tarnished the plane maker's image.

The result: an overhaul of top executives and a restructuring plan which foresees 10,000 job cuts over four years, not to mention billions of dollars in lost profit. The setbacks saddled Airbus with its first-ever loss last year and slashed net profit at parent group EADS.

Botched management of the flagship A380 superjumbo dashed Airbus hopes of dominating the market. The world's largest passenger plane — which made its first appearance at the 2005 Paris show — is two years late due to wiring difficulties and communication failures between Airbus plants in Germany and France.

The 525-seat plane will make a second appearance at this year's air show, with daily flying displays designed to wow visitors into forgetting about the last two years. Analysts say the plane's problems were largely managerial and technically it should be hailed a success.

[mitch0927]

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