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Aviation giants battle it out for Asia

Airbus
Airbus has won an $800 million contract to sell 20 jets to China Eastern Airlines  


From Lisa Barron
CNN Hong Kong

(CNN) -- It took two years, but U.S. aerospace giant Boeing finally beat competition from European rivals, landing a $4.5 billion deal to sell 40 fighter jets to South Korea.

Just days earlier, Boeing's chief rival, European plane maker Airbus won an $800 million contract to sell 20 jets to China Eastern Airlines.

In the wake of September 11, Asia has become the most important battleground for orders between the two companies.

"It is in fact particularly important at this moment because it's the one market that's coming back strongly," Stephen Miller of Trinity Aviation told CNN.

"It is the one market where airlines are still ordering. It's the one market where although some airlines grounded aircraft, they're being brought back into service."

Both Airbus and Boeing expect the Asian market to triple within 20 years, overtaking North America as the world's largest. Yet each is taking a different approach -- literally -- to the region.

"Here's one company Boeing, taking the approach they're going to see more point to point flying, which would mean smaller aircraft over long thin routes," said Jim Eckes of Indosuisse Aviation.

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"And here's Airbus with the A380, an aircraft with the philosophy of flying large numbers of people between major hubs."

The A380 is a 555 seat double decker, 97 of which have already been ordered. Singapore Airlines will be the first in Asia to operate one, in 2006.

Caution from Cathay

Hong Kong's flagship carrier, Cathay Pacific, is taking a more cautious stance and has delayed ordering the A380.

While demand in the biggest market, China, keeps rising, aircraft orders are somewhat split between Boeing and Airbus.

But there are other factors at work.

"China is always busy looking at the political side. If they're upset with the U.S. they go to Europe and buy European. If they're upset with Europe, they go to the U.S."

"But they can't buy only from one because then they would be paying a much higher price," Eckes added.

Aviation analysts say since it is in the interests of neither airlines nor governments for either Boeing or Airbus to have a monopoly, they're likely to go head to head, especially in Asia, for a very long time.



 
 
 
 


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