Competition with Boeing

For a comparison of Airbus A350 and Boeing 787 orders, click here.
For a comparison of Airbus A380 and Boeing 747-8 orders, click here.
Airbus is in tight competition with Boeing every year for aircraft orders. Though both manufacturers have a broad product range in various segments from single-aisle to wide-body, both manufacturers' offerings do not always compete head-to-head. Instead they respond with models a bit smaller or a bit bigger than the other in order to plug any holes in demand and achieve a better edge. The A380, for example, is designed to be a bit bigger than the 747. The A350XWB competes with the high end of the 787 and the low end of the 777. The A320 is bigger than the 737-700 but smaller than the 737-800. The A321 is bigger than the 737-900 but smaller than the previous 757-200. Airlines also see this as a benefit since they get a more complete product range from 100 seats to 500 seats than if both companies offered identical aircraft.
In recent years the Boeing 777 has outsold its Airbus counterparts, which include the A340 family as well as the A330-300. The smaller A330-200 competes with the 767, outselling its Boeing counterpart. The A380 is anticipated to further reduce sales of the Boeing 747, gaining Airbus a share of the market in very large aircraft. Boeing is building a stretched version of the 747, the 747-8, which will provide increased competition for the A380.
There are around 3,850 Airbus aircraft in service, with Airbus winning more than 50 per cent of aircraft orders in recent years. Airbus products are still outnumbered 6 to 1 by in-service Boeings (there are over 5,000 Boeing 737s alone in service). This however is indicative of historical success - Airbus made a late entry into the modern jet airliner market (1972 vs. 1958 for Boeing).
Airbus won a greater share of orders in 2003, 2004. It also delivered more aircraft in 2003, 2004, 2005 & 2006.
In 2005, Airbus made a claim to victory again with 1111 (1055 net)[18], compared to 1029 (net of 1002) for Boeing[18] However, Boeing won 55% of 2005 orders by value, due to that firm winning several important widebody sales at the expense of Airbus.
In 2006 Boeing won more orders by both measures.

[edit] Subsidies
Boeing has continually protested over "launch aid" and other forms of government aid to Airbus, while Airbus has argued that Boeing receives illegal subsidies through military and research contracts and tax breaks.
In July 2004 Harry Stonecipher (then-Boeing CEO) accused Airbus of abusing a 1992 bilateral EU-US agreement providing for disciplines for large civil aircraft support from governments. Airbus is given reimbursable launch investment (RLI, called "launch aid" by the US) from European governments with the money being paid back with interest, plus indefinite royalties, but only if the aircraft is a commercial success[18]. Airbus contends that this system is fully compliant with the 1992 agreement and WTO rules. The agreement allows up to 33 per cent of the programme cost to be met through government loans which are to be fully repaid within 17 years with interest and royalties. These loans are held at a minimum interest rate equal to the cost of government borrowing plus 0.25%, which would be below market rates available to Airbus without government support[18]. Airbus claims that since the signature of the EU-U.S. Agreement in 1992, it has repaid European governments more than U.S.$6.7 billion and that this is 40% more than it has received.[18].
Airbus argues that the pork barrel military contracts awarded to Boeing (the second largest U.S. defence contractor) are in effect a form of subsidy (see the Boeing KC-767 military contracting controversy). The significant U.S. government support of technology development via NASA also provides significant support to Boeing, as does the large tax breaks offered to Boeing which some claim are in violation of the 1992 agreement and WTO rules. In its recent products such as the 787, Boeing has also been offered substantial support from local and state governments[19]. However it has been argued that in U.S. government support of technology development, anyone can benefit from the results; even Airbus can benefit from them.
In January 2005 the European Union and United States trade representatives, Peter Mandelson and Robert Zoellick (since replaced by Rob Portman) respectively, agreed to talks aimed at resolving the increasing tensions. These talks were not successful with the dispute becoming more acrimonious rather than approaching a settlement.
[edit] World Trade Organization litigation
On 31 May 2005 the United States filed a case against the European Union for providing allegedly illegal subsidies to Airbus. Twenty-four hours later the European Union filed a complaint against the United States protesting support for Boeing.[18]
Portman (from the USA) and Mandelson (from the EU) issued a joint statement stating: "We remain united in our determination that this dispute shall not affect our cooperation on wider bilateral and multilateral trade issues. We have worked together well so far, and intend to continue to do so."
Tensions increased by the support for the Airbus A380 have erupted into a potential trade war due to the upcoming launch of the Airbus A350. Airbus would ideally like the A350 programme to be launched with the help of state loans covering a third of the development costs although it has stated it will launch without these loans if required. The A350 will compete with Boeing's most successful project in recent years, the 787 Dreamliner.
EU trade officials are questioning the funding provided by NASA, the Department of Defense (in particular in the form of R&D contracts that benefited Boeing) as well as funding from US states (in particular the State of Washington, the State of Kansas and the State of Illinois) for the launch of Boeing aircraft, in particular the 787.