Wednesday, June 13, 2007

Airbus Keeps Losing Altitude

From today's Wall Street Journal:

Airbus had hoped to shore up its credibility with customers before the industry's most closely watched trade show of the year. Five years behind Boeing in developing a new midsize long-haul jetliner, Airbus has booked only 13 firm orders for the A350, compared with nearly 600 for Boeing's 787 Dreamliner.

The European plane maker must move quickly. Customers are racing to secure delivery spots in the Dreamliner order book, making it difficult for Airbus to catch up. In recent weeks, Airbus has offered steep discounts and other incentives for A350, said one airline and others familiar with the matter.
Airbus, the product socialist and statist economics, is getting it's butt kicked by Boeing, a capitalist corporation. Something worth noting in this is that Airbus is now offering steep discounts.

Just think about things like big screen plasma TVs. When they first came out, were steep discounts offered? No. That's because first units are usually priced high to pick up the enthusiastic buyers and pay off some of the development costs. If you've got to discount the early models, you're in real trouble.

Update: Welcome WSJ readers! Here's another, longer bit on Airbus and a better one on the European Galileo project.

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