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 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 monstrous size of 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.^[1] On the other hand, 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.^[1]

Structural Comparison of the Airbus 380 to the Boeing 787-8 Dreamliner^[2]

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.

Orders

Filled with its share of large backlogs and production/delivery delays, the A380-787 Dreamliner battle may very well be won by the company who can best fulfill their contracts.

Slated to be released in 3Q2009^[5] Boeing's Dreamliner has a large backlog to address. As of July 28, 2008 Boeing has 896 total orders^[6] 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 (35) and Japan Airways (35).^[6]

The Airbus A380, whose first commercial flight occurred in October 2007, also has a hefty order count of 192 planes^[7] as of August 7, 2008. Note that this count includes only the A380 model, and not the A380F (freight model) as production delays and backlogs forced Airbus to focus on the commercial A380.^[8] However, this release came after two years of their own delays and nearly €5 billion over budget.^[9] Total lost earnings from Airbus delays are estimated to be $6 billion.^[10] 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]

Airbus announced its first six-month schedule delay in June of 2005, followed by two further delays in June and October of 2006.^[11] Their schedule delays consisted of pushing back delivery dates and number of plane shipments. The company cites internal wiring problems as well as airline customizations^[11] as the main cause for the initial delays. However, on October 3, 2006 Airbus announced a newly restructured production and delivery schedule, aiming to reach their full production rate of 45 planes per year in 2010.^[12]

However, Boeing has its fair share of delays as well. April 9, 2008 saw Boeing delay its production and delivery schedule for the Dreamliner a fourth time, making for a 3Q2009 debut. In the Dreamliner's case, Boeing blames unspecified design flaws^[13] as the culprit, resulting in $4.1 million^[10] in penalty payments as of July 2008. The seemingly continuous delays are damaging the reliability of Boeing. On August 7, 2008, Boeing lost its first 787 order as Azerbaijan Airlines reduced its original order from three to two.^[14]

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.^[15] 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.

Companies that win from both sides

Within the aircraft industry face-off, many companies do business for both Boeing and Airbus. Several companies have major contracts with both sides, including:

• 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^[16] as well as $3.5 billion in contracts with Boeing.^[17] 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^[18].
• 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.^[19] Boeing and Thales have teamed up to provide program management and systems engineering in a contract valued at £16 billion.^[20]
• Spirit Aerosystems Holdings (SPR) is a designer and manufacturer of aircraft parts. In 2008, SPR will earn $4.4 billion in revenue from the two companies combined, though the individual contract amounts were not included.^[21]
• 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.^[22] Boeing completed a similar deal in 2006 with the Russian company, worth $22 billion for engineering services and titanium products for 30 years.^[23]
• 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^[24] 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.^[25]

However, many companies benefit with one side of the dupoly, or hold larger contracts with Boeing and Airbus.

Airbus A380 Winners

• Honeywell International (HON) is a engine manufacturer and also produces cockpit electronics for airplanes. Airbus signed a $16 billion contract with Honeywell, putting the firm in charge of the service and mechanical systems aboard the A380.^[26] Also, Boeing has completed at least four deals with Honeywell for the Dreamliner, including a $2.6 billion December 2004 agreement for exterior lighting.^[27]
• 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^[28] 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.^[29]

Boeing 787 Dreamliner Winners

• 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.^[30] However, GE beat out Rolls Royce in a $2.5 billion engine supplying deal with Airbus back in 2002.^[31]
• Allegheny Technologies (ATI) refines titanium and other metals for worldwide clients. Boeing and ATI signed a $2.5 billion deal in late 2006^[32] 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.^[33]
• 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. ↑ ^{1.0 1.1} Can Boeing’s 787 Dreamliner Get off the Ground - or will Airbus Ride the A380 to New Heights?
2. ↑ BBC: Dreamliner Hit By Six Month Delay
3. ↑ Wikipedia: Dreamliner Orders
4. ↑ Wikipedia: A380 Orders
5. ↑ Boeing again delays 787 jetliner
6. ↑ ^{6.0 6.1} Wikipedia: 787 Orders
7. ↑ ^{7.0 7.1} Wikipedia: Airbus Orders and Deliveries
8. ↑ Airbus loses all A380F ordersnews
9. ↑ Airbus Goes Into The Red
10. ↑ ^{10.0 10.1} Pies in the sky – A380 and Dreamliner Delays
11. ↑ ^{11.0 11.1 11.2} Wikipedia: Airbus A380 delays
12. ↑ Airbus confirms further A380 delay and launches company restructuring plan
13. ↑ Boeing admits Dreamliner delay
14. ↑ Boeing loses first 787 order since announcing delays
15. ↑ Northrop Grumman gets $40B deal to replace Air Force tankers
16. ↑ Rockwell Collins to Produce U.S. Army's JTRS as Part of Boeing Team; Anticipates More Than $2 Billion for Cluster 1 Program
17. ↑ Pilot Controls Expands Rockwell Collins Content on Boeing 7E7 Dreamliner
18. ↑ Rockwell Collins' information management, navigation capabilities selected for Airbus A350 XWB
19. ↑ Thales confirms wins Airbus plane parts deal
20. ↑ Thales-Boeing team to run UK's £16 billion military project news
21. ↑ Spirit AeroSystems Holdings, Inc. Reports Second Quarter 2008 Financial Results; Raises Full-Year 2008 EPS Guidance
22. ↑ Russia's VSMPO, Airbus sign $4 bln titanium deal
23. ↑ Titanium: Boeing Signs Deal with VSMPO-Avisma
24. ↑ Boeing 7E7 Aircraft Contract Could Bring Billions for Goodrich
25. ↑ Goodrich Selected to Supply Landing Gear for the Airbus A380; Contract Value Could Exceed $2 Billion Over 20 Years
26. ↑ Honeywell wins $16 billion Airbus contract
27. ↑ Honeywell Wins Lighting Contract for Boeing 7E7
28. ↑ Airbus selects DHL as lead transport provider
29. ↑ Airbus signs multi-year contracts with Kuehne + Nagel and DHL
30. ↑ New York Times: Boeing Awards Engine Contract to G.E. and Rolls-Royce
31. ↑ General Electric Venture Wins $1.5 Billion Deal to Supply Airbus Engines
32. ↑ Allegheny Technologies and Boeing Sign Long-Term Titanium Products Supply Agreement
33. ↑ [http://www.boeing.com/commercial/news/2005/q2/nr_050503g.html Boeing Names Donaldson to Provide New 787 Air Purification System}
34. ↑ ^{34.0 34.1} Airbus Product Viewer
35. ↑ ^{35.0 35.1 35.2} Boeing 787 Dreamliner Fact Sheet