Re: ATR-72's and Airbuses

Date:         16 Dec 96 03:15:39 
From:         Alan Wong <Alan.Wong@anu.edu.au>
References:   1 2 3 4
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H Andrew Chuang wrote:
> > Consider the consequences if Airbus wasn't around. Boeing would easily
> > have a monopoly and the prices of planes would skyrocket. Furthermore,
> > there would be no B777 or B747-500/600 or B737-600/700/800. R&D would
> > stagnate leaving us with planes whose designs are decades old.
>
> This is a very poor assumption.  During the past 25 years, Boeing's
> market share has not changed significantly.  McD is the big loser (IMHO,
> Airbus is a major cause, but McD has to take some blames themselves).
> Without Airbus, McD could have launched other projects and offered a
> complete family of planes to compete with Boeing.  Without Airbus, even
> Lockheed might have decided to stay in the competition.  Although, Boeing
> has the monopoly in the B747 market, the cost per seat of the B747 is
> no more than the cost per seat of the A340.  As long as there are more
> than one supplier, the cost of an airplane will be driven by the market
> not by the supplier.

Mmm. In my opinion the B777, B747-500/600 and B737-600/700/800 are somewhat
influenced by the existence of equivalent Airbus models. Remember that
Boeing was putting forward the B767-400 before the airlines insisted
on something brand new? With the A330/A340 available, Boeing couldn't say
"This is what we are building. Take it or leave it." As for the B747-500/600,
they come with major huge advances - new wing, fly-by-wire, new type
certificate  over the current B747-400. Now compare the B747-400
with older 747s and you can tell me whether the prospects of an A3XX has
anything to do with it. Similarly, the new generation 737s are now getting
transcontinental range, something the A320 series already has.

What I am saying is that without comprehensive competition offered by Airbus,
Boeing would only touch up its existing products rather than making large
advances. Instead of the "new" products, we'd only get B747-400 type
enhancements. And being a business, you can't blame them for not wanting to
build "new" products when the "old" ones will do the job and make the same
amount of money. As for McD or Lockheed offering that competition to Boeing,
I really doubt it. Lockheed had the L1011 and nearly went broke during Airbus'
infancy. (You'll have to convince me they pulled out of commercial jets
because of Airbus.) McD has had its two platforms (the DC-9 and DC-10) for
almost thirty years! I reckon if Airbus hadn't killed off McD, then Boeing
would certainly have.

> Nevertheless, it seems Airbus still needs government loans to build the
> A3XX.

Well, here is an explaination (not a justification). To offer a complete
family, you need lots of models. The costs on each developed model take
many years to recover. Airbus has developed the A320 series and the A330/340
in the past decade or so. That's a lot of money spent. To develop another
model, the A3XX, they need to spend money they can't possibily have got
yet. Another consideration is that it is increasingly expensive to start
from scratch. An analogy is education. Many years ago, a bachelor degree
can get you quite a long way. Now, you need postgraduate qualifications.
In short, the hurdles are getting higher all the time. Thus Airbus' task
of starting as a major jet manufacturer is considerably more difficult than
Boeing's or McD's was when they started.