News Analysis: Boeing and Airbus up the PR stakes

Boeing's decision to review its PR account in the UK signals an upping of the ante in its trans-Atlantic battle with rival Airbus. Tom Williams identifies the players, the planes and the corporate reputations at stake.

Boeing's decision to review its PR support comes at a defining moment for the world's civil aerospace industry.

The high cost of developing civilian passenger aircraft can only be borne by a small number of aircraft manufacturers, with the industry is now dominated by Boeing and Airbus.

Over the past year in particular Chicago-based Boeing has come under intense pressure from European rival Airbus to get the attention of the world's airlines, whose passenger market grows at an average rate of around six per cent a year.

The PR war between the two giants has come to a head in recent months over Boeing's 257-seat 7E7 Dreamliner, which will roll out in 2008 - and for which in July Boeing announced 62 confirmed orders from four carriers - and Airbus's plans for the 200 to 300-seater A350, which is awaiting approval from its shareholders EADS and BAE Systems.

War of words

The debate around the A350, plans for which have been seen by some as an attempt to spike Boeing's guns, is a crucial point in the war of words that has raged throughout 2004. But it is also a huge reputational and financial risk for Airbus, which has (intentionally or unintentionally) set up a confrontation that could damage both firms.

'We don't know whether the A350 is a serious rival to the 7E7 or just a stalking horse. Airbus may be trying to persuade airlines not to buy the 7E7 and wait for the A350,' says Jane's Transport Finance editor Jim Smith. 'The trouble is, Airbus already has the (555-seater) A380 in development. It is not smart to have two planes in development at the same time because costs are huge.'

Airbus, with its earlier strategy of building bigger aircraft such as the A380 - which will carry more passengers than the Boeing 747 - hacked away at its rival's market share last month, securing a £2.1bn order for 70 A320 single-aisle, medium-range aircraft from Air Berlin, the German low-cost carrier, and its Austrian partner airline Niki.

But look again at who actually makes the planes now in service (see box) and Boeing still has the upper hand. Although Airbus's 320 family of aircraft is at first glance the most widely used, Boeing can claim dominance from the legacy of its 737 family, earliest models of which were first delivered in 1968.

Boeing UK director of comms Nick West claims the US company is more in tune with its market than its European rival, having planes such as the 7E7, for long-haul comfort, based on what passengers say they want.

'We are focusing on the way people want to fly, which is point-to-point, traveling direct to save time. The 7E7 will set new environmental performance levels, deliver efficiencies for airlines and reconnect passengers with the magic of flight,' he says.

West will not comment on Airbus's PR tactics, but sources close to Boeing claim that the announcement of the A350 is a tacit admission by Airbus that Boeing's strategy of delivering comfort, efficiency and environmental friendliness is the right one to pursue.

The view that Airbus's strategy is bigger-is-best comes from the company's forecast for 2003-2022 published earlier this year. In it, Airbus appeared to reject Boeing's belief that aviation markets will fragment. 'The total number of city-pairs (points of origin and destination) served by mainline jets has stagnated,' Airbus said, arguing that as airport and air traffic control infrastructure struggle to cope, 'airlines will have to acquire larger aircraft'.

The announcement of plans to produce the A350 to take on the 7E7, supporters of Boeing claim, could be a spectacularly expensive U-turn for Airbus.

But Airbus argues that the 7E7 represents Boeing's attempt to recapture its 200-300-seater market, formerly serviced by its 767 range, which Airbus vice-president of media relations Barbara Kracht says her company's A330/200 'killed'.

'The idea for the A350 sprang from our customers' comments that they would like the 330/200 to have more range. We have always believed that there is a need for larger aircraft such as the A380 and point-to-point aircraft,' she says.

Kracht also dismisses talk of the financial strain of having two majorplanes in development, pointing outthat engineering work on the A380 is winding down for its first flight next year, freeing up resources for the A350 if Airbus's shareholders approve it.

The battle for supremacy has also taken on a political dimension, through both sides' close financial alignment with their own economic territories.

The dispute between the US and the EU over what they both claim is unfair state aid to Boeing and Airbus respectively, looks set to drag on into the new year. The dispute is part of a wider EU/US trade war that has been brewing for some time, but the prospect that independent arbitration could find both parties in the wrong would be an undignified spectacle for both companies in the new year.

Boeing's move to shore up its PR efforts is timely - 2005 will be a year when the company and its European rival need all the PR help they can get.


Family Seats Planes in service

Airbus A320 family 100-175 2,163

Boeing 737 CFM (300/400/500) 100-180 1,892

Boeing 737 Next Generation 160-190 1,444

BoeingMD 80 170 1,092

Boeing 747 416-524 1,030

Figures do not include Boeing737 100/200 series, which ranks ninth with

690 in service. The 4,026 total number of 737s in service would make it

the most widely used model. Source: Flight International


Boeing - V-P of international comms Matthew de la Haye is Chicago-based Boeing's most senior PRO. EMEA comms director Charlie Miller co-ordinates comms for Europe, the Middle East and Africa through local heads of comms in Boeing's key markets including UK comms director Nick West. Boeing retains Harrison Cowley in the UK but is reviewing the account.

Airbus - Toulouse-based Airbus is owned by defence and aerospace firm EADS, which has an 80 per cent stake, and BAE Systems which holds 20 per cent. Jean-Claude Nicolas is Airbus SV-P of comms and its most senior PRO. Barbara Kracht is V-P of media relations; Howard Berry is UK head of comms. It retains Financial Dynamics for UK corporate and financial comms.

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