Airbus lawsuit coming? (and other thoughts)

From: (H Andrew Chuang)
Organization: Concentric Internet Services
Date:         20 Jul 96 15:59:11 
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As Air-India is about to make its decision on the purchasing of a
medium-capacity, long-range aircraft, a recurring piece of news came out
on a newswire report from New Delhi, India.  According to the report,
Airbus has started legal proceedings against Boeing for allegedly making
misleading statements about the under-performance of the A330/340.

According to Airbus, some of the false claims that Boeing have allegedly
made include:

1. The speed of A340 was Mach 0.80 instead of 0.82.
2. Boeing enjoyed a 70% global market share in this segment.
3. The 777 has 30 more seats than the A330/340.

My comments on the three claims:

1. The speed issue has recently been discussed in this group.  Whether it
   is 0.80 or 0.82, the A340 is slower.  Boeing's claim is that with the
   B777, airlines will have the flexibility to interchange the B747 and
   the B777 as the market demands without changing the schedule.  OTOH,
   Boeing may have overplayed the significance of 30-to-45-minute "delay"
   on a very long flight.

2. On the market share, Airbus is just as guilty as Boeing.  Airbus
   conveniently discarded the B777-300 sales in their comparison, because
   of the B777-300's much larger size.  However, Airbus failed to point
   out the B777 does not compete with the A340-200 and the A330-200 since
   both are much smaller aircraft than the the B777-200.  This year, the
   A330/340 is doing quite well.  If you pay attention to recent Boeing
   ads, Boeing still used the 1990-95 figures which strongly favor Boeing,
   but Boeing did clearly say to the end of 1995.

3. About the capacity, I know the B777 is bigger, but I don't know how
   accurate the 30-seat figure is.  I also know that in a high-density
   configuration, both aircraft are allowed to put 440 seats which is the
   maximum capacity limited by the number of exits.

Boeing and Airbus fairly evenly split the "first-generation", widebody-twin
(A300/A310/B767) market.  Airbus has a slight edge in total orders (I
think), but the Boeing still receives significant B767 orders while Airbus
receives very few A300/310 orders.  Boeing also has a much healthier B767
backlog than the A300/310.  Furthermore, with the launch of the A330-200,
the A300 program won't last for too much longer.  One interesting fact is
that very few airlines operate both the A300/310 and the B767.  The few
which have both aircraft by choice are: Air France, American, EgyptAir,
Kuwait, and ARIA (Aeroflot); and there are a couple that have/had both
due to merging: Qantas, Delta.  Well, the list may not be complete, but
the point is there are very few, and only Air France and American have
sizable fleet of both twins.

OTOH, there are already nine airlines that have ordered both the A330/340
and the B777 (which has 20 airline customers), namely, Cathay Pacific
(330/340), Thai International (330), All Nippon (340), Malaysia (330),
Korean Air (330), Singapore (340), Garuda (330), EgyptAir (340), and
Kuwait (340).  It is also understood that Korea's Asiana will soon order
both the A330 and the B777.  Air China and Virgin Atlantic are likely to
order the B777 while both already have the A340 on order or in service.
IMHO, politics may have played a bigger role than the product.  I was told
by a Korean friend that Asiana was "instructed" by the Korean government
not to upset either side.  That may also explain why Korean Air has one the
most "diverse" fleet in the world.

One last comment concerning the A3XX.  I used to think it was unwise for
Airbus to spend US$8-12 billion on the A3XX to compete with the B747X.  Now,
I'm not sure about it.  The Airbus design is capable of being stretched to
carry some 600-700 passengers.  I doubt the Boeing can do anything further
than the 550-passenger B747-600.

  H Andrew Chuang (