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EADS sees Airbus-Boeing duopoly ending

EADS sees Airbus-Boeing duopoly ending

For years, the Farnborough airshow was a bitter dogfight between Boeing and Airbus.
That may soon be over.
The head of Airbus parent EADS said Saturday that the duopoly is being challenged by new entrants from Canada, China, Brazil and Russia who are eyeing the lucrative single-aisle market.
"We have new competitors now," said Louis Gallois at a media day in London before the airshow, which starts Monday.
Canadian and Chinese competitors are the closest _ although they are still years from making a dent in the markets for the Airbus A320 and Boeing 737, he said.
Bombardier's C-Series is on track for its first delivery in 2013. Meanwhile China's state-owned Comac is readying for a 2016 first delivery date of its C919. Russia's Irkut and Brazils Embraer are also contenders.
"The new entrants are clearly braking the duopoly," said Chief Strategy Officer Marwan Lahoud.
To stay competitive, Airbus is upgrading its A320 by adding sharklets _ wingtip devices designed to improve fuel efficiency _ beginning in 2012.
In September, Airbus' board will decide whether to start including options for a new engine, available beginning in 2015, Chief Salesman John Leahy said.
But the single-aisle won't be replaced before 2025 at the earliest, he said.
Still, he remains sanguine about the competition. If Airbus and Boeing fit new engines then Bombardier has "no business case" for its C-series, he said.
And the newcomers have more challenges than making a new plane _ they need a marketing strategy, a product support service, and a reputation, he said.
"It might not take them 40 years, but the first 20 years are going to be tough," he said.
EADS is celebrating its tenth anniversary this year, and to celebrate it is offering employees ten free shares each, Gallois said.
Much of that history has been rocky, involving political infighting between its French, German, Spanish and British factions, management missteps and technological problems that have dogged its A380 superjumbo and the A400M military transport aircraft programs.
Gallois said the A380 program is "back on track," but he is still negotiating with the seven customer governments of the A400M _ which will fly at the airshow.
Earlier this year, the parties agreed on the broad outlines of how to share the burdens of the over-budget and much delayed program, but since then Europe's governments have been distracted by the debt crisis and have failed to sign a new contract.
More broadly, Gallois said he is seeing a rebound in the commercial aviation market after the crisis, making up for a tight defense market.
"I think we have to be prepared to see progressively orders coming back," he said, adding that he doesn't expect there to be a big upsurge this year or next.
But in Europe, where governments are tightening their belts, defense budgets are under pressure and Gallois said EADS has to adapt to that.
Stefan Zoller, head of EADS' defense and security division, said he will be looking to the growth markets of Brazil, India and the Middle East.
"We have to go where the money is," he said.
EADS' long term goal is to reduce its dependence on commercial aviation by boosting its defense business and growing in the dollar zone.
He said he has the go-ahead from the board to look at "reasonably sized" acquisitions, particularly in the U.S.
Meanwhile, at the airshow, Leahy he has bet Gallois "that we'll more than double" the 131 gross orders that Airbus has made to the end of June.