Airbus’ strategy of the yore was to build smaller, lighter and more economical commercial planes as opposed to Boeing’s ambitious undertakings of ‘bigger is better’.

Now the strategies are reversed. While Airbus has caught on to the Boeing mania of gigantic planes, Boeing has embraced the Airbus strategy of building planes that are economical for the airlines. Both strategies are based on the vision of the future as seen by the two giants of the sky.

Which strategy comes out the winner will become clear only  after a couple of years. At present the Dreamliner 787 looks set to blow the competition away, if it  hasn’t already.

The Dreamliner 787 has already created aviation record of booking 677 orders worth $100 billion while a single plane hasn’t flown as yet. It’s no less than a miracle for Boeing which was struggling to profitably sell commercial airliners and this is their first new plane in 12 years. No doubt with all this hype, Boeing’s stock has climbed appreciably.

But is the Dreamliner 787 worth the hype? The plane does not look futuristic or anything, so it’s the not first impressions. What has caught the fancy of the airline industry is that the plane is made almost completely with carbon composites, which makes it lighter and fuel efficient. In fact Boeing is claiming it saves 20% on fuel and is more environment-friendly.

Size wise it is no match for the gigantic Airbus A380. While the Dreamliner 787 has anywhere between 210-330 seats depending upon the model, the Airbus A380 has a staggering capacity of 519 seats which can be upgraded to 800+. This 550 ton plane has got two full-fledged decks, double staircase, sleeping quarters for the crew and a host of other features.

On the face of it, the Airbus A380 looks like a clear winner. However, production glitches and delays have marred the enthusiasm of the buyers which is clearly reflected in the less-than-impressive order figures for 2006; 824 against Boeing’s 1050, an all-time record for Boeing.

The king of the sky for the larger part of the 20^th century,

Boeing began losing ground to Airbus at a frightening pace

in the 1990s when it was happily engrossed in diluting its own brand by acquiring every business under the sun. It acquired Rockwell International, a major aerospace and defense company in 1996, McDonnell Douglas, a competitor in aircraft manufacturing in 1997, and Hughes Aircraft, a leading space and communications company in 2000. At the end of this whirlwind expansion spree, Boeing was making satellites, AWACS airplanes, unmanned surveillance aircraft, guided missiles and GPS equipped handheld radios.

And yeah, it also  initiated an interest in air traffic management. It was doing everything except focus on its core competency, the commercial airliner. Things came to a head when in 1999 Airbus for the first time sold more planes than Boeing.

To be fair to the Boeing people, they had seen this coming a couple years before

and had already started working on a new strategy of smaller and faster planes (close to the speed of sound) that could cut an hour out of each 3,000 miles of flight. It had come up with the design of a new aircraft for this purpose, called the Sonic Cruiser. Why that plane never saw the light of day is anybody’s guess.

However, a strategy to counter the Airbus attack wasn’t the only thing lacking. Boeing’s massive operations based on paper work and plethora of computers without a central system to communicate effectively all added up to the downfall. It’s no wonder that this time around, Boeing is outsourcing much of the manufacturing of the Dreamliner 787 to Japan, especially Kawasaki and Mitsubishi. Historically, Boeing produced almost the entire aircraft on its own.

On the face of it, Boeing has a lot going for its new plane. It’s not clear whether a proper branding effort has gone into the Dreamliner project, but the result is a brand that’s keenly following the Laws of Branding.

It has a short unique memorable name with a positive connotation, i.e. the name is going to conjure up positive images in the mind of the consumer, something that Airbus A380 lacks. Even the model number; 787 slips off the tongue more easily than A380 or even A350.

Airbus may argue such branding is not necessary since the consumer is not the general public but the airlines whose concern is not the frills but what the actual product offers them. That may be right, but then why does Airbus made such a huge publicity stunt with the launching of the A380 involving the general public as well?

The answer is at the end of the day, like in any other industry, in the aircraft industry as well the perception of the brand in the minds of the consumers, either direct or indirect, counts more than the actual product itself.

Dreamliner then has the advantage of being first in a new category, the first plane with 50% body made up of composites instead of aluminum. But then the A380 was also the first in a category, the category being the Super-Jumbo Jet.

Who emerges as the winner is a question that cannot be answered at least for the next half decade unless one of the giants indulges in something extraordinarily stupid.

No related posts.