Essay on Economics: Boeing 747

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Airplanes have become one of the easiest and fastest ways of travel today. Compared to trains and buses, the plane is one of the most comfortable rides and it cuts the time in half. This is mainly because of the advanced technology of today. Technology has become one of the most influential ways into creating a product. Two main companies that produce airplanes have recently been competing to create the best plane using the best technology. Airbus is a company that for a long time surpassed their rival Boeing in airplane production. In deliveries, it has beaten Boeing every year since 2003. (2). Because this company has been on top for so long they decided to create an airplane that they felt would keep them on top. Airbus created the A380. The A380 is the largest passenger airliner in the world. It provides seating for 525 people in standard three-class configuration or up to 853 people in full economy class configuration. (5). Some airlines such as Heathrow’s Terminal Three don’t think of its size as a positive because they will need to undergo expensive redesign just to accommodate the large aircraft. They will need more runways to clear the ground, and more taxiway for the wingspan. There are two versions of the A380. The first version is the A380-800, which is the passenger model. This model is the largest passenger airliner in the world knocking the Boeing 747 out of first place. While providing more room that a Boeing 747, the A380’s operating costs are reported to be about fifteen to twenty percent lower per seat. The second model is the A380-800F, which is the freighter model. This model is also the largest freight aircraft. Even though Airbus has produced two of the best airplanes, they still had many conflicting issues. There was nearly a two year delay on delivery because there were so many dilemmas. (4). Because Airbus has delayed their aircraft more than twice, FedEx and UPS have both placed their orders on hold until further notice. According to current Airbus calculations, a total of two hundred and fifty A380’s have to be sold in order for the company to breakeven. Currently, Airbus has only sold 154 aircrafts from 15 different airlines and if the company doesn’t fulfill this quota, they will incur a considerable loss. This was just enough time for Boeing to compete with the A380 and they secured a tentative order for about fifty aircrafts. Boeing was initially knocked out of first place but they didn’t lose. Boeing produced the 787 Dreamliner. This aircraft pretty much knocked the A380 off of its feet. At first, Airbus’ CEO, Noel Foregard didn’t take Boeing’s 787 “Dreamliner” seriously stating that “We don’t need to react to the presentation of this plane.” (2)
Unfortunately, Foregard was wrong. Not only did the “Dreamliner” surpass the A380, it actually took some of Airbus’ sales. Companies that were purchasing the A380 decided to go with the Dreamliner. The 787 “Dreamliner is a mid-sized, wide-body, twin engine jet airliner scheduled to enter service in May 2008. It will carry between 210 and 330 passengers. The 787 is claimed to be at least twenty percent more fuel-efficient than current competing aircrafts. The “Dreamliner” also has ideas to include gyms, bars, casinos, shops, offices, and even play areas. They are trying to offer a “relaxing sweeping archways design.” Window shades will be able to be altered with the flick of a button. Aisles will be wider as will the seats. (1). The 787 used many different contractors to create this aircraft. One very important resource was the Japanese. Their industrial participation was very important because now this aircraft is funded by the Japanese government. (3). Because the Japanese government has announced a production agreement involving about $6 billion worth of carbon fiber, a lot of concerns have been eased. Some
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