Boeing Dreamliner vs. Airbus A380

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James Connolly

Within one of the larger duopoly industries, the Boeing-Airbus aircraft battle wages on with Boeing's 787 Dreamliner and Airbus' A380. Marred by production delays, significant backlogs, and rising fuel prices, the rivalry is as intense as ever.

With this new issue in the plane production competition, Boeing and Airbus split ways on their fuel-conserving strategies. With the A380, Airbus aims for a new level of airborne mass transit as it opted for two decks each with dual isles and a total carrying capacity of over 520. The A380 family is designed for longer trips and more passengers, seeking fuel-conservation by consolidation. However, Boeing explored a handful of roles for its three 787 Dreamliner planes (its first new planes since 1995). While the 787-3 is modeled for large capacity-short distance, the 787-8 and 787-9 look to provide smaller capacity-longer distance aircraft.

Structural Comparison of the Airbus 380 to the Boeing 787-8 Dreamliner^[1]

Though these new airplanes will prolong the deep-rooted rivalry of Boeing and Airbus, the niches of the A380 family and 787 Dreamliner group do not completely overlap. Boeing's 787-3 is closest in statistics to the A380, yet the A380 has over one and a half times the capacity and nearly three times the range. Moreover, with smaller and more fuel-efficient planes in the 787-8 and the 787-9, Boeing avoided direct competition with the A380. The fact that Boeing and Airbus took diverging paths with their new aircraft installations means that perhaps the two can coexist in niche roles.

Orders

Filled with its share of large backlogs and production/delivery delays, the A380-787 Dreamliner battle may very well be decided in the production efficiency ring.

Slated to be released in 3Q2009^[3] Boeing's Dreamliner has a large backlog to address. As of July 28, 2008 Boeing has 896 total orders^[4] for all three Dreamliner designs (787-3, 8, and 9). The six largest orders include the International Lease Finance Corporation (74), Quantas Airways (65), All Nippon Airways (50), Air Canada (37), and Ethiad Airways & Japan Airways (35 each).^[4]

The Airbus A380, whose first commercial flight occurred in October 2007, also has a hefty backlog of 192 planes^[5] as of August 7, 2008. However, this release came after two years of their own delays and nearly €5 billion over budget.^[6] The top 6 A380 orders come from: Emirates Ariline (58), Quantas Airways (20), Singapore Airlines (19), Lufthansa (15), Air France (12) and British Airways (12).^[7]

However, the seemingly endless delays for the Dreamliner compounds Boeing's competitive position. For instance, on March 1, 2008, the US Air Force announced that it would enter into a $40 billion contract with Airbus and Northrop Grumman, a military and defense aircraft parts manufacturer, over the domestic company Boeing.^[8] The USAF cited the A380's larger size as the main deciding factor, but multiple delays on the initial release and first commercial flight certainly did not help.

Competitive Overview

Within the aircraft industry face-off, many companies are invested on either side of the industry. However, a handful of companies benefit with every plane sold, including:

• General Electric Company (GE), a worldwide technology producer and Rolls Royce (RR), a British aircraft engine company, work together to manufacture engines for Boeing. In 2004, Boeing announced that GE and RR would produce the engines for the Dreamliner in a contract that runs for 25 years and up to $40 billion.^[9] However, GE beat out Rolls Royce in a $2.5 billion engine supplying deal with Airbus back in 2002.^[10]
• Honeywell International (HON) is a comprehensive engine manufacturer and also produces cockpit electronics for airplanes. Honeywell does business for both Boeing and Airbus, and is a winner with either side. Airbus signed a $16 billion contract with Honeywell, putting the firm in charge of the service and mechanical systems aboard the A380.^[11] Also, Boeing has completed at least four deals with Honeywell for the Dreamliner, including a $2.6 billion December 2004 agreement for exterior lighting.^[12]
• Rockwell Collins (COL) is a producer of aviation, information technology, pilot control, and cabin systems for commercial and governmental clients. As a Boeing partner, COL anticipates $2 billion in contracts with the US Army^[13] as well as $3.5 billion in contracts with Boeing.^[14] Though no deals specific to the A380 have been released, Airbus signed an agreement in 2008 with COL for navigation and information systems for the Airbus A350 worth about $2.5 billion^[15].
• Thales is a manufacturer of information systems for aviation and defense clients. Airbus and Thales signed a 20 year deal in early 2008 for the aviation systems aboard the A380 which is expected to total €2 billion.^[16] Boeing and Thales have teamed up to provide program management and systems engineering in a contract valued at £16 billion.^[17]
• Spirit Aerosystems Holdings (SPR) is a designer and manufacturer of aircraft parts. In 2008, SPR will earn $4.4 billion in revenue from both companies combined, though the individual contract amounts were not included.^[18]
• VSMPO-AVISMA is a Russian refiner or titanium and other special metals. June 14, 2008 saw Airbus and VSMPO lock up a deal through 2020 valued at $4 billion.^[19] Boeing completed a similar deal in 2006 with the Russian company, worth $22 billion for engineering services and titanium products for 30 years.^[20]
• Goodrich Corporation (GR), a U.S. airplane parts maker producing engine, internal electronic, and landing systems. On April 16, 2004 Boeing announced that Goodrich would be responsible for the landing gear and thrust components on the Dreamliner for up to 10 years and $4 billion dollars^[21] when its 2007 annual revenue is slightly over $6 billion. In 2001, Goodrich also signed a deal with Airbus to supply the landing gear for the plane, totaling $2 billion over 20 years.^[22]

Larger Airbus A380 Winners

• Dhl is a transport company specializing in express shipping. On June 30, 2008, Airbus and DHL announced a 5 year agreement, whereby DHL becomes the lead-transport provider and a tier-one partner of Airbus^[23] DHL does general transportation work for Airbus, including the transit of parts to their factories.
• Kuehne & Nagel is a global logistics firm that manages warehouse facilities for Airbus. Airbus also signed a multi-year deal with Kuehne & Nagel, putting the company in charge of Airbus warehouse consolidation within Europe.^[24]

Larger Boeing 787 Dreamliner Winners

• Allegheny Technologies (ATI) refines titanium and other metals for worldwide clients. Boeing and ATI signed a $2.5 billion deal in late 2006^[25] that runs through 2015.
• Donaldson Company (DCI) produces engine and filtration systems for worldwide clients. On May 3, 2005, Boeing announced that the air filtration systems on the Dreamliner would be done by Donaldson.^[26]
• Other companies that profit with Boeing include Mitsubishi Electric Corporation, Moog Inc., and Ducommun Technologies.

Comparison

Below is a chart comparing the statistics of the Airbus A380 family and the Boeing 787 Dreamliner family.

References

1. ↑ BBC: Dreamliner Hit By Six Month Delay
2. ↑ Airbus A380 vs Boeing Dreamliner
3. ↑ Boeing again delays 787 jetliner
4. ↑ ^{4.0 4.1} Wikipedia: 787 Orders
5. ↑ Wikipedia: Airbus Orders and Deliveries
6. ↑ Airbus Goes Into The Red
7. ↑
8. ↑ Northrop Grumman gets $40B deal to replace Air Force tankers
9. ↑ New York Times: Boeing Awards Engine Contract to G.E. and Rolls-Royce
10. ↑ General Electric Venture Wins $1.5 Billion Deal to Supply Airbus Engines
11. ↑ Honeywell wins $16 billion Airbus contract
12. ↑ Honeywell Wins Lighting Contract for Boeing 7E7
13. ↑ Rockwell Collins to Produce U.S. Army's JTRS as Part of Boeing Team; Anticipates More Than $2 Billion for Cluster 1 Program
14. ↑ Pilot Controls Expands Rockwell Collins Content on Boeing 7E7 Dreamliner
15. ↑ Rockwell Collins' information management, navigation capabilities selected for Airbus A350 XWB
16. ↑ Thales confirms wins Airbus plane parts deal
17. ↑ Thales-Boeing team to run UK's £16 billion military project news
18. ↑ Spirit AeroSystems Holdings, Inc. Reports Second Quarter 2008 Financial Results; Raises Full-Year 2008 EPS Guidance
19. ↑ Russia's VSMPO, Airbus sign $4 bln titanium deal
20. ↑ Titanium: Boeing Signs Deal with VSMPO-Avisma
21. ↑ Boeing 7E7 Aircraft Contract Could Bring Billions for Goodrich
22. ↑ Goodrich Selected to Supply Landing Gear for the Airbus A380; Contract Value Could Exceed $2 Billion Over 20 Years
23. ↑ Airbus selects DHL as lead transport provider
24. ↑ Airbus signs multi-year contracts with Kuehne + Nagel and DHL
25. ↑ Allegheny Technologies and Boeing Sign Long-Term Titanium Products Supply Agreement
26. ↑ [http://www.boeing.com/commercial/news/2005/q2/nr_050503g.html Boeing Names Donaldson to Provide New 787 Air Purification System}
27. ↑ ^{27.0 27.1} Airbus Product Viewer
28. ↑ ^{28.0 28.1 28.2} Boeing 787 Dreamliner Fact Sheet
29. ↑ Wikipedia: Boeing 787