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The Contender

How Airbus got to be number one.

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(Continued from page 2)

The team was determined to be on time and within budget—a first for any European joint program. “The motivation was incredible,” says Thomas. “When I called people to work on Saturday or Sunday, it was the people who weren’t called who were insulted.” The A300 debuted on schedule in 1974.

With soaring fuel prices, it was the worst time for a new airplane. Airbus logged a dribble of orders in 1975, followed by a 16-month drought. From the end of 1975 until April 1977, not one aircraft was sold, and “white tails” —airplanes without customers—began to appear on the Toulouse ramp.

In the dark days of 1976, Thomas recalls, “we had a meeting of 25 or 30 people, with this gentleman I had never seen before.” Bernard Lathiere was a graduate of the Ecole Nationale d’Administration, where France trains its elite, and he had been sent on a mission: Step in as president, replacing Ziegler, and either kill Airbus or save it. A sharp contrast to his immediate subordinates, the lean, ascetic Beteille and Kracht, Lathiere was a florid glad-hander, a natural speaker who became Airbus’ chief salesman.

One light gleamed: Western Airlines had ordered eight airplanes, with an option for four more. It was the first time a U.S. airline had bought a European jet since 1964. But at the end of January 1977, Western announced it had ordered 727s instead. Airbus canceled orders for long-lead items—parts that would be needed for aircraft delivered in 1979. It was close to the end.

Then, in April, Thai International ordered four airplanes. And Eastern Airlines, losing money and desperate for modern aircraft, agreed to accept four A300s on a no-charge, six-month lease. If Eastern found the A300 as cheap to buy, operate, and maintain as advertised, it would buy 28 airplanes on very favorable terms for the airline. In April 1978, Eastern signed up to buy 23 A300s.

Before the Eastern sale, Airbus had kept one major plan under wraps. From the start, Beteille had insisted that the Airbus be developed into a family of aircraft; he did not want to produce a dead end like the Caravelle. “I had to keep that secret,” he recalls. “Everyone would have said I was crazy.” Adam Brown first saw such a proposal in September 1975. There was a 200-seat aircraft, the A300B10, for post-1973-fuel-shock markets; a stretched A300B9; and a long-range, four-engine A300B11.

Beteille based his family plans on a simple formula. In the 1970s, he points out, Boeing had about 60 percent of the market and McDonnell Douglas had 30 percent. “Boeing was making money, and Douglas was just about covering its costs. So either Airbus gains 30 percent of the market, or we never cover our costs, and one day or another, we die.” Until the sales drought broke, Airbus did not even want to talk about the 200-seat B10. With growing sales, it took the plan public in 1977.

But there was one problem: Boeing was developing two new airplanes—the narrow-body 757 and the twin-aisle 767—and looking for partners. In Britain, the government wanted work for the nationalized British Aerospace, which had absorbed BAC and Hawker Siddeley. Boeing offered a package deal: British Aerospace would build the wing of the new 757. It would have a Rolls-Royce engine, with British Airways and Eastern Airlines as launch customers. Rolls-Royce was 100 percent behind this option, as was British Airways.

But France and Germany no longer wanted British Aerospace (the former Hawker Siddeley part) as a subcontractor to Airbus. Either BAe would come on board as a full government-backed partner, or Germany would build the wings of the A310, as the B10 was now known. The clock was ticking: In July 1978, with an order from United, Boeing launched the 767, calling it “the A300 replacement.” In a final compromise, Rolls-Royce got money to build the 757’s engine, British Airways bought the Boeing airplane that it wanted, and BAe joined Airbus as a full partner.

European consortia like those for Transall, a French-German military transport, and Concorde had been one-product deals. With the A310, Airbus changed: No longer the group that made the A300, it became Europe’s airliner builder. Before the A310, Aerospatiale, BAC, and others had proposed a smaller European jet to compete with the 737 and DC-9. Afterward, there was little argument that this smaller jet would be an Airbus product. But Beteille saw a problem with the new project: “I was convinced that the 737 was so good that there was no way to compete with it by doing the same thing.”

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