HUGE MISTAKE OR HUGE SUCCESS? AIRBUS ALL IN ON NEED FOR A380 - BUT BOEING STILL DOUBTFUL

It was an unlikely gathering of aviation rivals from opposite sides of the Atlantic. At the Four Seasons Hotel in Munich, Germany, officials from Airbus and The Boeing Co. had wrapped up two days of meetings with an extravagant dinner. But...


It was an unlikely gathering of aviation rivals from opposite sides of the Atlantic.

At the Four Seasons Hotel in Munich, Germany, officials from Airbus and The Boeing Co. had wrapped up two days of meetings with an extravagant dinner.

But they would not be breaking bread together again.

After several years of secret meetings and discussions in Seattle and Toulouse, France, Boeing said it was pulling out of a joint feasibility study to determine if the industry needed a new and bigger jumbo jet, and, if it did, could the two airplane makers design and develop one together. Such a massive undertaking, Boeing had concluded, was too risky and expensive.

One of the Airbus officials who was there would later tell a Wall Street Journal reporter that Airbus had looked at the same data and decided the real risk to the European companies that made up Airbus was in not going ahead. As the Airbus group lingered in the hotel's lobby bar after the dinner with Boeing, they decided to "go our own way," the official told the paper.

Although Airbus had announced at the Paris Air Show in June 1991 that it would begin to study the development of a 600- to 700-seat jumbo jet, what would become the Airbus A380 was arguably born in the hotel bar that night, in April 1995.

Nearly $20 billion later, and after a wild, 12-year roller-coaster ride of embarrassing delays, setbacks and triumphs, Airbus last week finally delivered the first of the double-decker A380s to launch customer Singapore Airlines.

On Thursday, the airline will put the A380 into commercial service with a flight from Changi Airport in Singapore to Sydney, Australia. It is one of the most anticipated aviation events in years. Singapore Airlines auctioned off many of the 471 seats on the plane, with one person paying more than $100,000 to be on the historic flight.

Not since Boeing's 747-100 entered commercial service with Pan Am in January 1970 has there been so much public anticipation and excitement about a new commercial jetliner. But while the 747 changed air travel in its heyday, the celebration and hoopla surrounding the introduction of the A380 only serves, for now at least, to mark a new chapter in an industry debate that began even before Boeing and Airbus went their separate ways after the meeting in Munich a dozen years ago.

Capacity vs. range

Boeing argues that in an era of open skies and deregulation, more and more airlines will fly passengers on smaller planes from point to point - which is how they want to travel anyway - and bypass the big hub airports that the A380 was designed to serve. The market for big planes has fragmented and there is simply not enough demand for jets the size of the 747 or bigger to justify the huge development costs of an all-new jet such as the A380, according to the Boeing view. So it has bet its future on a midsize jet, the 787 Dreamliner.

Airbus agrees there is more fragmentation and point-to-point service, but it is confident the market for large planes is much bigger than Boeing has forecast.

Airports are increasingly congested, and many, such as London's Heathrow, have slot constraints, limiting the number of jets an airline can operate. That makes the bigger A380 the ideal plane, the Airbus argument goes. And besides, many hub airports are actually where people want to travel to and from.

And so the stage is set for two contrasting visions to play out about how people will fly. The day of the A380 has arrived.

John Leahy, the longtime tenacious Airbus sales chief, may have best summed up what's at stake for Airbus.

"Either this is going to be that flagship of the 21st century or it's going to be a disaster," he says in an Airbus documentary about the making of the A380.

With two full decks and wings nearly as long as a football field, the A380 represents the crowning achievement for Airbus, which as recently as 1995 had only about 20 percent of the market for commercial jets with more than 100 seats. Now Airbus has about 50 percent and is delivering more planes than its U.S. rival.

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