Saturday, June 24, 2000

Airbus envisions 550-seat airliner

By Mike Boyer
The Cincinnati Enquirer

        GE Aircraft Engines, which has teamed with rival Pratt & Whitney to develop a new engine for Airbus Industrie's planned super jumbo airliner, said Friday it was “delighted” the European aircraft maker is moving ahead with the 550-seat jet.

        But some analysts, who question how soon a market will develop for the double-deck A3XX, anticipate major battles ahead between Airbus and Seattle-based Boeing Co., which is determined to defend the dominant position of its 747 jetliner in the widebody market.

        “This is going to be Texas Clock Tower ugly,” said Richard Aboulafia, senior analyst with Teal Group Inc., a Fairfax, Va. aviation and defense market research firm.

        Airbus' four European owners said they've agreed to transform the aircraft maker from a loose partnership into a company to begin selling the A3XX, which will be the world's biggest passenger jet.

        The decision to form Airbus Integrated Co. will, for the first time in Airbus's 30-year history, put all planemaking assets under central control. That will cut 350 million euros ($328 million) a year from costs by 2004, the partners said, and will enable Airbus to compete more effectively with Boeing.

        “We're delighted with the Airbus announcement,” said Pat Klaus, a GEAE spokeswoman.

        Two years ago, GEAE and Pratt, owned by United Technologies Corp., agreed to spend up to $1 billion to develop a new engine in the 67,000 to 80,000-pound

        thrust range for the A3XX.

        Earlier this year GEAE successfully completed engine core tests in Evendale on the new power plant, dubbed the GP7200.

        The GE-Pratt partnership, known as the Engine Alliance, anticipates delivering the GP7200 in 2005 when Airbus plans to introduce the four-engine jetliner. Rolls-Royce plans to offer a version of its Trent engine for the A3XX.

        Airbus says eight companies, including Air France and Singapore Airlines, have expressed interest in the A3XX, but it doesn't have any firm commitments that would allow it to begin building the huge jetliner.

        A Boeing spokesman said the Airbus partners still have a long way to go “before they begin cutting metal.”

        Boeing and Airbus differ over the potential size of the jumbo-jet market. Airbus says it sees a market for more than 1,200 of the aircraft over the next 20 years, while Boeing envisions a market of only about 360 planes.

        Boeing has decided to modernize its 747 family of planes rather than build its own jumbo jet. A proposed “stretch” version of the 747-400 would add about 100 seats.

        Mr. Aboulafia anticipates a market for about 30-40 A3XXs being sold annually but doesn't see that market developing for at least 10 years.

        The new Airbus company will be 80 percent-owned by the European Aeronautics Defense and Space Co., formed last year from the merger of France's Aerospatiale Matra, Germany's DaimlerChrysler Aerospace and Spain's Casa. EADS is planning an initial offering of up to 166.5 million shares on the Frankfurt and Paris stock exchanges July 10.

        British Aerospace Systems, the fourth partner in Airbus Industrie, will hold the remaining 20 percent of Airbus Integrated Co.

        The Associated Press and Bloomberg News contributed to this report.


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