6:37 PM

The most critical 'Paris' ever for Airbus

Not since a guy named Lindbergh landed there back in 1927 has Le Bourget been this important to world aviation interests. That is because at this year's biannual Paris Air Show, the two power players in the airliner biz are again going to duke it out toe to toe for world supremacy.

Every two years, Airbus and Boeing enter a cage match at this field north of the French capital, locked into a battle to see who can sell the most heavy iron. The last time these two met was 2005, and Airbus announced orders worth $33.5 billion, more than twice that of Boeing's $15 billion.

But analysts worldwide agree that these last two years have been painful for Airbus as they struggle to get the A350 and A380 to market. Businessweek.com runs one of the best stories out there on the current debacle that is Airbus:

Delivery of its A380 megaplane, originally scheduled for early 2006, is almost two years behind schedule because of wiring problems caused by mismatched design software. The delay plunged Airbus $750 million into the red last year and is expected to wipe out more than $6 billion in projected profits through 2010, denying the company a key source of financing to develop the A350. And, multiple redesigns of the A350 have already pushed its planned launch to at least 2013, five years after the 787 is expected to enter service.
These same analysts all agree however that Airbus is not going out of business. If they can get back on track, their fat order book – said to be in range of 2,500 backorders – ought to keep the lights on for a while.

Just how critical to the future of Airbus is this year's Paris show? The Businessweek article shines some light on that question:
But at least one big customer appears to have walked: Steven Udvar-Hazy, chairman of aircraft-leasing group International Lease Finance Corporation, the world's single largest aircraft buyer. He has repeatedly criticized the A350's design, and ILFC is set to place a major Dreamliner order during the Paris show, according to people familiar with the situation.
But while Airbus has been flailing, Boeing has been crashing the gates, pushing forward at record levels:
Total Boeing company revenues for 2006 surpassed USD $60 billion. The company set a company record in 2006 with orders for 1,040 planes, and as of June 12th, Boeing had 429 tallied in the book...going in to Paris.
With so much excitement surrounding the Dreamliner, and so much controversy surrounding Airbus, expect the tensions to run high at the Paris show, from load-in until the last exhibit aircraft has blasted off for home. If industry speculators are correct, we will see a wave of new business flock to Boeing's “booth”, cash in hand, ready to pounce and get a good spot in the 787 delivery schedule.

And while it is easy to speculate that Boeing will do some serious business at Paris, what will really make it a painful show for Airbus is if more previous A350 buyers like ILFC and impatient A380 buyers find their way to the Boeing tent. We can always assume a few will switch allegiances each show, but if the numbers are substantial, this show could be a memorable turning point in the history of commercial aviation.

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