Boeing Inches Ahead of Rival Airbus

Boeing vs Airbus – at Moneyweek.co.uk - the best of the week's international financial media.

Just last week Airbus chiefs tried to soothe the airliners' fears regarding the six month delay to their new giant 555-seat A380 plane: they said that such delays are not out of the ordinary and affect even their competitors. Now, however, BAE Systems, who has a 20% stake in Airbus, has admitted that the A380 is being delayed by "problems with systems", says Reuters.co.uk.

"Some of the systems are not as they should be on the A380," BAE chief executive Mike Turner said yesterday.

As it is, the pressure is building on EADS, who owns 80% of Airbus, to resolve the internal debates currently holding up the appointment of its new co-chief executives. BAE Systems has not dispelled the possibility that it may dump its 20% stake in Airbus in the light of the planemaker's troubles.

Airbus is also facing increasing pressure from rival Boeing, whose new 787 Dreamliner will have "higher cabin pressure closer to that at ground level", making the flight more comfortable for passengers, says Lex in the FT. And the group's revival looks impressive, as it has secured 57% of the market share so far this year.

These numbers are "deadly serious": in an industry with just two competitors, such a small advantage in market share will generate much higher profits. Yet whatever their "pockets of strength and annual victories", says Lex, in the longer term, the "duopoly is likely to maintain rough parity". This is because neither the economics nor the customers will be happy with anything less.

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