Chalk One Up for Airbus
Airbus scored a very nice and important order for the A350XWB, its competitive answer to Boeing's 787 Dreamliner. Good for them. Now the question is can they deliver it on time?
UPDATE: A reader, who has a fine blog, rightly points to this, revealing that what lies behind any milestone for the A350 is a government subsidy. It should go without saying that I take state involvement to be a given. We are well beyond that, Airbus could not do what it does without massive state support. That said, handouts alone won't be enough for Airbus to compete with Boeing, it still has to identify what type of planes people want to fly on and thus airlines want to buy. And then it has to build them. In the case of the A380, it is still not obvious that they have even gotten those tasks right, and a government check can't help them with those aspects. With the A350, at least, it seems that the risk that they will build a plane that nobody wants is low. The main risk is that the continued internal turmoil and/or just the sheer volume and complexity entailed in launching two major programs, the A380 and A350, somewhat simultaneously will trip them up again and they won't be able to deliver the planes on time.
UPDATE: A reader, who has a fine blog, rightly points to this, revealing that what lies behind any milestone for the A350 is a government subsidy. It should go without saying that I take state involvement to be a given. We are well beyond that, Airbus could not do what it does without massive state support. That said, handouts alone won't be enough for Airbus to compete with Boeing, it still has to identify what type of planes people want to fly on and thus airlines want to buy. And then it has to build them. In the case of the A380, it is still not obvious that they have even gotten those tasks right, and a government check can't help them with those aspects. With the A350, at least, it seems that the risk that they will build a plane that nobody wants is low. The main risk is that the continued internal turmoil and/or just the sheer volume and complexity entailed in launching two major programs, the A380 and A350, somewhat simultaneously will trip them up again and they won't be able to deliver the planes on time.
posted by Donny Baseball at 10:27 AM
2 Comments:
Only with more socialism, i.e. taxpayer funds:
http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article1576815.ece
Thanks for the kind compliment, you're one of my favorites on markets and background...the practical version. You've ran such a great series on Airbus, every time I see something regarding I think of you. I also enjoy your differences with Mankiw (pigovian taxes). I agree with you by the way. In any case, thanks for your kind regards.
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