Boeing to downplay dominance lead

Date: 12/06/1997

BOEING will be looking to make its biggest rival, the Airbus Consortium, eat its words when the two sides come face to face in Brussels this week.

Top executives from the world's biggest planemaker will highlight Airbus' optimistic predictions about its future world market share at hearings today (12 June) and tomorrow, organised by the European Commission to consider Boeing's planned take-over of US rival McDonnell Douglas.

The Boeing move is aimed at shooting down Competition Commissioner Karel van Miert's concerns that its acquisition of the rival company's civil aircraft and defence operations could give it a dominant position in aircraft manufacturing.

Boeing will highlight Airbus' claims that it will have around half the market for sales of large civil aircraft soon after the year 2000. The US giant will also focus on the European consortium's recent moves to widen its production by building smaller and bigger aircraft than those in its current range.

Airbus last month signed a memorandum of understanding to produce a 100-seat jet in China together with Italy's Alenia, Chinese and Singaporean partners. The A319 is currently its smallest model with capacity for 125 seats.

It is also investigating the production of a new jumbo jet, the A3XX, with around 550 seats which would allow it to compete for the first time with Boeing's 747. Airbus' biggest existing model, the A340-300, seats 295 passengers.

The European planemaker is scheduled to decide late next year whether to put the new aircraft into production after taking soundings from the world's major airlines.

By bringing Airbus' future plans into the equation, Boeing is challenging the snapshot figures for production and world sales of large civil aircraft being used by the Commission's competition officials to judge the take-over.

These figures give Boeing 64&percent; of the world market for large civil aircraft in 1996, with Airbus at 30&percent;, and McDonnell Douglas at 6&percent;. In Europe, the figures are similar, with Boeing on 61&percent;, Airbus on 37&percent; and McDonnell Douglas on only 2&percent;.

Commission officials have said that planned aircraft launches are not being built into their market evaluation, but Boeing argues that they should be looking ahead, as they normally do in merger cases, to take account of market developments.

The Commission is due to give its verdict on the Boeing take-over next month. Van Miert has already highlighted other aspects of the deal which have raised concern such as Boeing's long-term exclusive supply contracts with some airlines.