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Airbus Hopes Big Plane Will Take Off, Beat Boeing

By contrast, Americans fly more often per capita than any other travelers in the world, but growth in passenger traffic has largely matured at a 2.7 percent annual rate. Although many foreign carriers plan to fly the huge plane into some U.S. airports, Airbus does not expect early orders for the $250 million planes from financially struggling U.S. carriers. The cargo company FedEx Corp. is the American exception. It has ordered 10 cargo versions.

The megaplane broadens Airbus's assault on Boeing's lead in world aviation. Another Airbus plane, the A340-600, this year began flying the world's longest nonstop flight from Singapore to New York, an 18 1/2-hour journey. Airbus's smaller planes have become a favorite of low-fare carriers such as JetBlue Airways, and some analysts said the competition forced Boeing to shake up its top sales executives earlier this month.

An artist rendition of Airbus Industrie's new A380 airplane. (Airbus Industrie via AP)

Airbus also announced plans this month to build a plane to compete with Boeing's new 7E7 Dreamliner, a double-aisle aircraft scheduled to debut in 2008. The 7E7, Boeing's first new aircraft in a decade, is aimed at the growing market for mid-size aircraft flown by low-fare carriers. It is designed to have fuel-efficient engines and is constructed of materials that are lighter weight than those usually found on commercial airliners.

Airbus's A350, which is expected to be approved by the company's owner, European Aeronautic Defence and Space Company, hopes to compete with the 7E7 on fuel efficiency.

The rivalry between the two companies erupted into a trade war in October when the United States and Europe charged that the other unfairly subsidized its domestic airplane manufacturer. The companies are competing for stakes in an estimated $2 trillion aircraft market over the next 20 years.

Boeing has the opposite view of the future of commercial aviation and said it has no plans to develop a superjumbo to compete with the Airbus A380. Although it once considered jointly building a giant plane with Airbus, the Chicago company now says it sees no profit and no market for such a plane. The A380 "just doesn't make sense," said Randy Baseler, Boeing's commercial airplane vice president for marketing. "We know airplane sizes are going down."

Several U.S. aviation analysts agree that Airbus may have difficulty turning a profit on the huge plane. The company has sold the plane at reported discounts of 35 percent to 40 percent, said Frost & Sullivan, which means it would have to sell 325 planes to break even. Airbus said it needs to sell 250 planes for the project's success.

Airbus contends that its A380 is arriving at an ideal time -- just as airlines will be looking to replace their aging Boeing 747s. By offering more room and greater luxury than the 747, the A380 will shake up the entire market for large aircraft, according to one of the early architects. "It's like the atomic bomb," said Philippe Jarry, senior vice president of product strategy.

Since the top-flight amenities will largely be found in first class, coach passengers -- with their one extra inch in seat width and no benefit in leg room -- may not recognize the plane's revolutionary aspects. Airbus says, however, that fares for the A380 should be attractive because its fuel-efficient engines will reduce operating costs.

Airbus has sold 139 of the A380s, mostly to government-backed airlines. Its largest customer is Emirates, a rapidly expanding state-owned carrier based in Dubai. The United Arab Emirates has an ambitious goal to make Dubai into a global tourism and transportation hub. The carrier plans to outfit 31 of its more than 40 megaplanes on order with first-class sections that offer "in-air bedrooms" that can be closed off from the rest of the cabin. The suites will each come with a minibar, a private closet to hang a jacket and a foot rest that can be turned into a second chair for a business meeting. The cabin will be outfitted with high-tech lighting to help adjust passengers' body clocks to cut down on jet lag.

"It will be like kids with new toys," said Tim Clark, chief director of Emirates. "People will go out of their way to fly on these planes."

Etihad Airways, based in the United Arab Emirates and barely a year old, has ordered three superjumbos. Singapore Airlines, the carrier with its 18-hour daily flights -- will be the first to fly the A380. Some European carriers, including Virgin Atlantic and Air France, have delayed delivery of the A380.

Airlines that have ordered the megaplane are pushing airports to quickly expand terminals and reinforce taxiways to sustain the plane's weight. Dulles International Airport plans to spend $6.5 million next year to modify two of its gates to accommodate the A380 after two carriers, Lufthansa and Virgin, expressed an interest in flying the big plane to Washington. Plans call for installing double-decker bridges so the plane could be loaded on both decks at once. A spokesman for the airport said he does not expect the A380 to arrive before 2007.

Reagan National Airport's terminals could not accommodate the A380, and Baltimore-Washington International Airport has not heard of any airlines interested in flying the plane there.

Los Angeles International Airport, expected to be one of the biggest hosts of A380 planes from Korean Air, Qantas Airways and Singapore Airlines, is scrambling to approve a plan to build a new terminal so that two of the aircraft could park next to each other. If the aircraft parked side-by-side today, the airport said, the wings would hit each other.

Some analysts are skeptical that airlines will ever make money on the A380 by filling them with passengers and cocktail lounges. The plane's small cargo compartment limits additional revenue that carriers can make by hauling freight. Since heavier planes consume more fuel per passenger, airlines will need to fill every seat on a flight to make money, said Richard Aboulafia, an industry analyst at Teal Group.

"You wonder why someone is adding more seats to an airplane if carriers can't even make money on the ones they have," Aboulafia said. "The industry is not exactly robust at this point."

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