European partners feud over future Airbus course
After three years of flying high, the European Airbus jetliner has hit some turbulence. While emphasizing that the long-term prospects remain bright, Airbus president Bernard Lathiere acknowledged recently that 1982 sales were down and that internal differences were nagging the consortium, especially its prospects for building a new 150-seat airliner.
''It's a problem of the market, not of the product,'' he said. Indeed, the entire aircraft market has slumped, hurting American competitors of the Airbus as well. Worldwide, only 33 wide-body airplanes were ordered last year, and Airbus succeeded in landing 17 of the orders, a record that left Mr. Lathiere optimistic about the future.
''We got more than 50 percent of the market,'' he said. ''In all, we have sold 350 Airbuses so far.''
But not everyone is so confident about the Airbus future - most significantly Gen. Jacques Mitterrand, the brother of the French President and president of Aero-spatiale, the French state aerospace company with a 37.9 percent interest in Airbus.
In a letter published in the Paris daily Le Monde last month, General Mitterrand said sales were disappointing and timidity by Europeans, especially German bankers, was hindering the sale of more than 40 Airbuses.
''In Britain and - above all - in West Germany,'' the two countries that along with France are the major Airbus shareholders, Mr. Mitterrand wrote, ''not only does the willingness (of the banks to take risks) not seem to exist, but the system works in the opposite direction.'' This timidity, he wrote, could translate into a long-term crisis for the European civil-aviation effort, leaving 78 out of 407 aircraft unsold by 1985.
The American aviation industry must find these complaints ironic. It has long complained that the European consortium used below-market funding agreements, behind-the-scenes government-to-government deals, and less-than-orthodox sales practices to sweep past both Lockheed and McDonnell Douglas in the late 1970s and become the world's second-largest seller of commercial aircraft.
Now, Mr. Mitterrand charges that the American export-import bank is letting Boeing, the main Airbus competitor, offer better finance arrangements than the Europeans. ''We must offer conditions for buying at least equivalent to those of our competitors,'' General Mitterrand wrote.
Mr. Lathiere said that on the whole, European credit arrangements remain competitive. But he did note two problems: First, he said, ''No airlines are popular with banks now - even American banks are wary.''
Second, he said, unity among the European partners has always been difficult to achieve - and yet Airbus has still been successful. ''We have our differences like any family,'' he said. ''It is my job to smooth out those differences.''
These differences exist because Airbus is a marriage of necessity, not love. It was founded only after stiff competition from American companies threatened to put the European airline industry out of business. At one point, the British government even backed out of the agreement as Airbus struggled through a tense 16-month period of new sales.
Then, a 1978 Eastern Airlines order for 28 planes broke the ice. Other orders began to pour in, and the partners had less problems getting along. A smaller Airbus, dubbed the A-310, with 35 percent better fuel economy than the older generation of jets, was developed and is now entering commercial use.
But last year's difficulties have split the consortium on the question of whether to develop a new 150-seat airplane, the so-called A-320. Airbus feels it needs the plane to make real inroads in the United States market and to give itself a full product line.
Development costs for the A-320, though, are estimated at $3 billion, and so far only Air France has placed an order. The Germans and the British want to hold back until more orders are in, while the French are pushing to go right ahead, hoping that when the plane is ready, the market will be as well.
Meanwhile, Boeing is already offering an updated version of its 737, a 130 -seater, and McDonnell Douglas is marketing its DC-9 Super 83, a fuel-efficient 155-seater. And in another effort to entice customers, McDonnell Douglas has begun leasing new aircraft - offering a bargain deal.
As a result the Americans have been making inroads even on the European's home turf. Air France recently put several new 737s into service, and British Airways this week decided not to wait for the new Airbus to be developed. Long a Boeing customer, it decided to stick with the 737 while adding DC-9s.
But don't count the Europeans out. Already, they are counterattacking. To reverse a recent decision by Thai Airlines to switch an Airbus order to Boeing, the three European governments have reportedly been putting direct pressure on the Thai government.
Mr. Lathiere also recently returned from Brazil, where he landed a contract with Cruzeiro Airlines. In return for this deal, the Europeans reportedly promised to buy more Brazilian imports.
Finally, Mr. Lathiere said he was even considering leasing Airbuses. At this point, though, he said Airbus problems do not warrant this extreme step.
For despite its present woes, Airbus remains Boeing's most formidable competitor.
''They make a very good product,'' said a Boeing representative here. ''When the market picks up, there should be room for both of us.'' Until it does, both airline giants will be struggling.