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Airbus signs off on rival to Boeing 787
http://www.marketwatch.com/1.gif
By August Cole, MarketWatch
Last Update: 6:30 PM ET Oct. 6, 2005
SAN FRANCISCO (MarketWatch) -- Aircraft maker Airbus on Thursday formally announced it will build its next new plane to compete against Boeing Co.'s 787 Dreamliner but it will do so for now without the launch subsidies that set off a Transatlantic trade spat.
The controversial support is in a holding pattern, Airbus and parents European Aeronautic Defence and Space Co. and BAE Systems said Thursday.
Airbus will receive no funds from France, Germany, Spain or the United Kingdom in 2006 "as long as there is a credible prospect of negotiations and similar restraint is being undertaken in the United States." The two sides went to the World Trade Organization over the aid, with Airbus claiming Boeing also receives government help, and are currently working on a settlement.
But the United States will continue to pursue its World Trade Organization case against Airbus, U.S. Trade Representative spokeswoman Christine Baker said Thursday in a statement. "It's clear that the EU countries are unwilling to stop subsidizing Airbus. Therefore, we will continue to push ahead with our WTO case," Baker said.
Boeing said it backs the effort to quash launch aid for Airbus through WTO litigation or a settlement. "Launch aid is above and beyond the other forms of government support Airbus already receives -- tax relief, government-sponsored R&D, and government-paid infrastructure projects," Boeing said in a statement.
The Airbus A350 is set to start service in 2010, two years after Boeing's all-composite 787 will be put to work. For the aerospace supplier community, the go-ahead on the A350 is good news, analysts said.
"Airbus is confidently predicting 200 firm orders for the aircraft before the end of the year. When coupled with sub-system awards for suppliers, the successful launch of the A350 could prove to be a positive catalyst for the aerospace suppliers," Banc of America Securities analyst Robert Stallard wrote in a research note.
Stallard wrote that he expects Airbus will want to work with suppliers who are already developing technology and components for the Boeing 787 "so as to piggyback off R&D that is already underway." The A350 will have a composite wing and an aluminum fuselage.
While Boeing is focused on the 787, Airbus is in the midst of launching its A380, a superjumbo jet that can seat twice as many people as the biggest version of the A350. The A350 will seat between 253 and 300 people.
Airbus plans to build the A350 at plants where it makes the A330 and A340. But overseas companies in Russia, China and elsewhere will also be involved, Airbus has said.
On Thursday, SG Securities upgraded EADS shares to buy from hold, citing double-digit aircraft delivery growth rates and a cost cutting program that should allow Airbus to increase sales and margins even as currency hedge rates deteriorate. See European Markets.
The firm wrote that 2005 civilian aircraft orders are likely to top 1989's previous peak. According to SG Securities, this will ensure that large aircraft deliveries reach some 900 units in 2008, a 50% increase from 2004.
Among Airbus' 140 customer commitments for the A350, Qatar Airways is set to take 60, and US Airways Group LCC is set for 20 jets.
C'mon USAir, Buy Boeing!
http://www.marketwatch.com/1.gif
By August Cole, MarketWatch
Last Update: 6:30 PM ET Oct. 6, 2005
SAN FRANCISCO (MarketWatch) -- Aircraft maker Airbus on Thursday formally announced it will build its next new plane to compete against Boeing Co.'s 787 Dreamliner but it will do so for now without the launch subsidies that set off a Transatlantic trade spat.
The controversial support is in a holding pattern, Airbus and parents European Aeronautic Defence and Space Co. and BAE Systems said Thursday.
Airbus will receive no funds from France, Germany, Spain or the United Kingdom in 2006 "as long as there is a credible prospect of negotiations and similar restraint is being undertaken in the United States." The two sides went to the World Trade Organization over the aid, with Airbus claiming Boeing also receives government help, and are currently working on a settlement.
But the United States will continue to pursue its World Trade Organization case against Airbus, U.S. Trade Representative spokeswoman Christine Baker said Thursday in a statement. "It's clear that the EU countries are unwilling to stop subsidizing Airbus. Therefore, we will continue to push ahead with our WTO case," Baker said.
Boeing said it backs the effort to quash launch aid for Airbus through WTO litigation or a settlement. "Launch aid is above and beyond the other forms of government support Airbus already receives -- tax relief, government-sponsored R&D, and government-paid infrastructure projects," Boeing said in a statement.
The Airbus A350 is set to start service in 2010, two years after Boeing's all-composite 787 will be put to work. For the aerospace supplier community, the go-ahead on the A350 is good news, analysts said.
"Airbus is confidently predicting 200 firm orders for the aircraft before the end of the year. When coupled with sub-system awards for suppliers, the successful launch of the A350 could prove to be a positive catalyst for the aerospace suppliers," Banc of America Securities analyst Robert Stallard wrote in a research note.
Stallard wrote that he expects Airbus will want to work with suppliers who are already developing technology and components for the Boeing 787 "so as to piggyback off R&D that is already underway." The A350 will have a composite wing and an aluminum fuselage.
While Boeing is focused on the 787, Airbus is in the midst of launching its A380, a superjumbo jet that can seat twice as many people as the biggest version of the A350. The A350 will seat between 253 and 300 people.
Airbus plans to build the A350 at plants where it makes the A330 and A340. But overseas companies in Russia, China and elsewhere will also be involved, Airbus has said.
On Thursday, SG Securities upgraded EADS shares to buy from hold, citing double-digit aircraft delivery growth rates and a cost cutting program that should allow Airbus to increase sales and margins even as currency hedge rates deteriorate. See European Markets.
The firm wrote that 2005 civilian aircraft orders are likely to top 1989's previous peak. According to SG Securities, this will ensure that large aircraft deliveries reach some 900 units in 2008, a 50% increase from 2004.
Among Airbus' 140 customer commitments for the A350, Qatar Airways is set to take 60, and US Airways Group LCC is set for 20 jets.
C'mon USAir, Buy Boeing!