December 16, 1996 in Nation/World

Aerospace Company Would Dwarf French Competitor

Associated Press

Airbus Industrie, Europe’s builder of large commercial aircraft, would face a fearsome challenge from a combination of its two competitors Boeing and McDonnell Douglas.

Boeing’s $13.3 billion deal for McDonnell, announced Sunday, would strengthen the Boeing dominance in commercial aviation, where Airbus has carved a roughly 30 percent share since its inception a quarter-century ago.

Accustomed to competing head-to-head with Boeing for the lucrative “super-jumbo” aircraft market, Airbus may feel pressure to restructure to cope with the new giant, said Paul Beaver, a spokesman for Jane’s Group, the London-based aviation industry publishing firm.

The merger, if approved by the U.S. government, “is going to have a profound effect on Airbus,” Beaver said.

Airbus spokeswoman Barbara Kracht declined to comment on the deal except to call it “something happening between two American companies.”

Airbus aircraft are manufactured under the consortium composed of Daimler-Benz Aerospace of Germany, Aerospatiale of France, British Aerospace and Construcciones Aeronauticas of Spain.

Airbus will have to make an effort “to appear on equal footing” with the new giant, Beaver said.

But the projected sales of the merged company will be twice the size of Airbus’ sales. “Airbus will be dwarfed,” he said.

© Copyright 1996 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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