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Thursday, 25 May, 2000, 14:52 GMT 15:52 UK
Boeing in Airbus's slipstream
Airbus A3XX - computer generated picture ŠAirbus Industrie
Emirates and Singapore airlines want the 3XX, four other carriers have expressed an interest
The next round in the long battle between Boeing and Airbus over supremacy in the skies is about to start, but as the BBC's Rodney Smith explains, much of the fighting will be done on the ground.

Boeing is considering building a super-stretched version of its venerable 747 to compete with the European Airbus's proposed A3XX superjumbo.

Airbus says there could be demand for well over 1,000 of these aircraft.

Up to this month, Boeing boss Phil Condit had been adamant that there was not sufficient market for Boeing to bother.

Testing of A3XX model in wind tunnel in Hamburg - ŠAirbus Industrie
Testing of A3XX models is well under way
Then two large go-getting airlines; Emirates and Singapore, indicated that they would be launch customers for the new A3XX.

Airbus also said another four carriers to have expressed an interest, Cathay Pacific and Japan Air Lines are understood to be among them.

Suddenly the aircraft bounced off the drawing board and began to look real.

Airbus is expected to launch the new aircraft formally after its next board meeting

That's when Mr Condit wrote around the airlines, promising a competitor to the Airbus.

Boeing behind

Aircraft industry pundits think Boeing has fallen a long way behind on this.

Whether they are right or wrong, one thing is certain: Boeing and the US will be watching like hawks for any signs of European state subsidy for the new aircraft.

Boeing and McDonnell Douglas, before their merger, were regular complainants about what they saw as an unfair level of European government support for the Airbus series.

We can expect to hear much more of this, the battle on the ground, so to speak, before the battle in the skies.

The battle of the subsidies

Much US aircraft development has been supported, traditionally, by the Defense Department and by NASA research programmes.

Airbus argues that McDonnell Douglas - now part of Boeing of course - and Boeing have a huge contract under the NASA Advanced Composites Technology Programme to develop wings and fuselage.

The results, paid for by the US taxpayer, are likely to form part of future Boeing aircraft. Boeing's 707 was built as a refuelling tanker, the 747 was a spin-off of a large transporter programme.

Boeing is smarting particularly because it is suffering the effects of a successful EU action against US subsidies - the WTO decision that US foreign sales corporations, which save US tax by registering offshore, are illegal.

This could cost Boeing almost $4bn a year in taxes it will now have to pay.

Some observers say there could be another end to this argument. Several years ago, Boeing and Airbus collaborated on a study for a new super-jumbo, but fell out. They say that Boeing could change its mind and join Airbus to build the new aircraft.

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See also:

30 Aug 99 | The Company File
22,000 jobs if A3xx goes ahead
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Row over super-Jumbo aid
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