As they move around the world stage, it is not surprising that players as large as Europe and America clash from time to time. Their politicians differ over how to deal with Iraq, their scientists argue about the dangers of genetically modified food, their businessmen wrangle over deals.
But high above the stage - at about 35,000 feet - the typical transatlantic rivalries turn into a cut-throat competition between two corporate behemoths. On any given day, somewhere in the world, the last remaining manufacturers of commercial jets - Boeing Corp. and Airbus Industrie - are dueling over an order for new jets. With tens of thousands of jobs and billions of dollars at stake, even dogfights over relatively small deals prompt phone calls from heads of state.
In this war between winged titans, the European consortium is claiming an important victory: In 1999, for the first time, Airbus clearly outsold Boeing around the world and across the board.
"One year is too short to be definitive," says
Chris Avery, aviation analyst with investment bankers J.P. Morgan in London. "But it is clear that Airbus is doing better than Boeing with a newer range of products and more aggressive marketing."
No one is writing off Boeing, the largest exporter in the United States, which, after all, built and delivered a record 620 jets last year, nearly double the Airbus output.
Since taking over McDonnell Douglas in 1997, Boeing is the world's biggest aeropspace firm, making jet fighters, and launching satellites, as well as building commercial planes.
"But the long-term trend shows that Airbus delivery rates will go the same way as their orders have already gone," points out Harald Hendrikse, an aerospace expert in London with Credit Suisse First Boston. "[Airbus] has more than caught up with Boeing, they have done very, very well and overtaken them."
Airbus had announced 420 aircraft sales by mid-December, and is expected to boost that figure this week. Boeing had announced only 205 sales before suddenly disclosing 163 previously unannounced orders last month, which narrowed the gap.
And the race is tough, as an ongoing battle over contracts with El Al - Israel's flagship and hitherto a loyal Boeing customer - has shown.
In a bid to break Boeing's grip on the El Al market, Airbus offered to reconfigure its planes to fit a synagogue inside. So did Boeing.
Then - in a sign of just how seriously Washington takes Boeing's business - US Secretary of State Madeleine Albright weighed in on her trip to Israel last month, issuing thinly veiled threats about the future of US aid to Israel if El Al bought Airbus jets.
"It would be extremely difficult for the American people to understand why Israel's official airline would look elsewhere" than the US, said James Rubin, Dr. Albright's spokesman.
Not to be outdone, four European leaders - Britain's Prime Minister Tony Blair, France's Premier Lionel Jospin, Germany's Chancellor Gerhard Schrder, and Italy's Prime Minister Massimo d'Alema - promptly wrote a joint letter to Israeli Prime Minister Ehud Barak urging him not to give in to US pressure.
El Al has signed a $400 million order for three Boeing 777s, and is still considering a plan to spend $340 million on three Airbus Industrie A-330s.
Analysts attribute Airbus's success last year to technology: Airbus builds all its planes - from the smallest to the largest - with the same computer-driven technology, which makes them very similar to fly regardless of size.
This "commonality" cuts down training time as pilots learn to fly new models, and makes maintenance easier, offering cost savings that airlines need badly in a tight market.
"The market has decided, and Airbus has gotten the commonality message," says Richard Aboulafia, aviation director at the Teal Group consultancy in Fairfax, Va.
At the same time, Airbus, which was founded in 1970 as a European consortium by French, German, British, and Spanish aerospace companies, has a newer product range competing with Boeing's jetliners, many of which were designed in the 1960s and 1970s. This makes Airbus planes more fuel and weight efficient, not to mention one inch of extra width in each seat, which many passengers appreciate.
Too much, too soon
Other factors, too, have contributed to Airbus's recent success. The main one, according to Paul Nisbet of JSA Research in Newport, R.I., is Boeing itself.
Boeing has messed up "royally," he says, "trying to do too much too quickly."
In the mid-1990s, Boeing tried to squeeze Airbus out of the narrow-body market by offering its 737 model very cheaply to a number of US airlines. At the same time as it tripled production of the 737 in order to meet the new demand, Boeing sought to digitize its production line to cut costs.
The effort "blew up in their faces," recalls Mr. Nisbet, and the company had to halt production of the 737 in the fall of 1997. Boeing is still getting over this catastrophe and fighting to bring its costs down.
Boeing executives, who say part of their strategy to restore Boeing to financial health is refusing to sell its planes at a loss, accuse Airbus of selling at below-cost prices in order to win market share. It is a claim with which some analysts agree, but which Airbus vehemently denies.
"Overall, the Airbus system is profitable, and so far we have never taken a loss on any sale," insists Airbus spokeswoman Barbara Kracht.But Airbus, as a grouping of economic interests, publishes no financial records, which makes such statements hard to verify.
As Boeing struggles back to profitability, it is taking radical measures.
The company has shed 40,000 jobs nationwide since mid-1998, and plans to cut another 8,000 this year. It has also pruned the number of its suppliers from 31,000 to 18,000.
"They are correcting things more quickly than expected," says Nisbet, but "it will be another two or three years at least before they can get their costs down enough to make good profits and be competitive."
Battle of behemoths
In the meantime, Airbus is planning to build a giant jetliner called the A3XX, carrying as many as 650 passengers, to compete with Boeing's 420-seat 747 jumbo jets.
It is hard to find any independent aviation experts who believe there will be a market big enough for this leviathan to offer a decent return on the $12 billion investment that Airbus estimates it will cost to build the plane.
"Airbus is making significantly over-optimistic assumptions to make a viable case for the A3XX, and it will fail miserably," says Credit Suisse First Boston's Mr. Hendrikse.
But national and continental pride also influence decisions - Europe would like to be able to challenge America's Boeing all the way up the product scale - and "the A3XX has become mired in a political swamp that has nothing to do with market realities," argues Mr. Aboulafia.
Could pride come before a fall? As Airbus prepares to invest billions in a project that seems stronger on grandeur than on profitability, and as Boeing slashes its workforce to stave off losses, and as both companies shower airlines with discounts so as to stay competitive, Hendrikse wonders how long it can all last.
"The silliest thing about this market," he says bluntly, "is that there are only two companies left in it, and they are killing each other."
(c) Copyright 2000. The Christian Science Publishing Society