Air Transport World

Transport sales campaigns getting more complicated.

Transport sales campaigns getting more complicated Struggle for transport sales in the volatile international airline market is intensifying, and the competition between Airbus Industrie and U.S. builders could become more bitter than in the past.

Selling airplanes for reasons other than specific fuel consumption and glowing range/payload curves, and at prices less than advertised "full retail," has been the accepted way on both sides of the Atlantic for as long as anyone can remember. The developing problem, however, is the U.S. government has made some of the "sophisticated" sales practices illegal, and U.S. companies like Boeing are crying foul. The U.S. laws obviously do not apply to Airbus, so Boeing finds itself in a game with two sets of rules. Boeing also feels it is now at a disadvantage in the great international game of government versus private industry competition.

There are four governments currently contributing to Airbus: Great Britain, France, Spain and West Germany. Chances of the company's ever returning a profit to its founding governments are extremely slim. But having invested at least $6.5-7 billion already, the governments can easily rationalize spending still more to obtain customers. That they have been doing in order to keep the production lines running at even minimal rates during the recession and now during the cautious-spending phase of the current economic upturn. Since it is the sovereign governments who own Airbus, it is the sovereign governments who are putting up the new incentives.

At one time Boeing's home market, the U.S. airlines, was all it needed for a running start on volume production and attractive unit prices for customers. Now, by Boeing's count, 60% of the market is abroad. The company is hardly unsophisticated, and no slouch in taking its gloves off when it has to (see below). …

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