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Airbus (EADSF.PK) is "being very careful" not to spark a price war with Boeing (BA) in the...

Airbus (EADSF.PK) is "being very careful" not to spark a price war with Boeing (BA) in the narrow-body passenger jet market and will seek to maintain a 60-40 split (in Airbus' favor) "even though the natural market might be two thirds-one third," COO for customers John Leahy tells FT. BA indicated last year it would "respond in kind" to aggressive sales strategies. One recalls the kinked demand curve model from Econ 101.
Comments (5)
  • SquareHead
    , contributor
    Comments (91) | Send Message
     
    Leahy thinks Airbus is entitled by the "natural market" to 66% of aircraft sales but is only going to limit himself 60% so as not to start a price war? This is arrogant and stupid. There is already a price war. In the 737/A320 types the only thing that differenciates the aircraft is price. The performance is very close to being the same. Either aircraft could have an advantage depending on the specific route. If I was out buying aircraft of this class only two things would matter: The aircraft currently in my fleet and price. Not nessessarily in that order.
    7 Jul 2013, 07:57 PM Reply Like
  • jamesvclark34
    , contributor
    Comments (17) | Send Message
     
    SquareHead sounds right on the money. Since BA has overcome battery problems. The ongoing bid for market share, increased sales and decreased production time will guide BA management to greater EPS.
    7 Jul 2013, 10:39 PM Reply Like
  • ebeuu
    , contributor
    Comments (378) | Send Message
     
    LUV is a good test.
    7 Jul 2013, 10:40 PM Reply Like
  • jasonhad
    , contributor
    Comments (84) | Send Message
     
    It's easy to get an advantage over Boeing - all you have to do is call on your national governments to subsidize your development costs and strong-arm their pseudo-national carriers to buy only Airbus, and ignore a World Trade Organization ruling that Airbus was illegally competing with disguised subsidies. You know that American government doesn't have the stomach to defend Boeing, so you can belittle the greatest innovator in American aviation with impunity.
    8 Jul 2013, 03:21 AM Reply Like
  • GarryGR
    , contributor
    Comments (238) | Send Message
     
    a "a 60-40 split" split of what? Revenue, deliveries, profits, yearly production or what? I assume you're talking of the orders, right? Airbus finds is much easier to "book orders" than to deliver planes and make money, two things that go together. Consider that Airbus won 9 out of 10 yearly order races with Boeing, in the decade leading up to 2012, and then Boeing delivered more planes than Airbus did! One would normally think that orders would predict the future but 2012 was one of those future years! :-)
    8 Jul 2013, 03:25 AM Reply Like
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