For the ninth successive year, Europe has emerged victorious in what has become one of the great transatlantic rivalries. Airbus, owned by the pan-European manufacturer EADS, had a record year for the industry in 2011, with 1,419 firm orders – worth around $140bn (£91bn) – for its aircraft, the best part of double that of Boeing.
The US group now has the lowest market share in the four-decade history of its great, often spiteful, competition with Airbus. Boeing will argue its jets have a higher average price tag, but even then EADS has a 54 per cent market share by value.
Announcing the order numbers in Hamburg yesterday, EADS chief executive Louis Gallois said: "We are more than a symbol of European integration. We are the part of Europe that works."
The political slant to that comment is important, as national interests pervade the aircraft industry. EADS may be a largely Franco-German project, with a small Spanish state shareholding, but it also employs 15,000 people in the UK, mainly in wing manufacturing roles in Filton near Bristol and Broughton in South Wales. Boeing, with revenue of more than $64bn and 165,000 employees, is a strategic company for the US.
At a time when the euro is in turmoil and the US appears to be on the brink of economic recovery, EADS' dominance in this duopoly is an important source of European pride. But given the bitterness between these titans of the aircraft industry, Boeing will not make it easy for EADS to maintain that lead. The US group has vowed that 2012 will be "Boeing's year".
EADS' growth last year was built on the back of the A320 Neo, which has proven hugely popular since its late 2010 launch as the plane is so fuel efficient. Boeing was slow to respond, only coming up with significant changes to the 737 model that is popular with budget airlines in July.
John Leahy, Airbus' top salesman, smirks: "It's not just my fault [Airbus' sales dominance]. Boeing helped by not getting their act together."
Perhaps Mr Leahy should hold the wisecracks. The 737 MAX is a re-engined plane which Boeing claims is even more fuel efficient than the Neo.
Although Boeing is undoubtedly behind, the fact it took so long to announce the MAX meant the Neo had a clear run at picking up customers. Even EADS admits there is pent-up demand from Boeing's existing customers for the MAX and that orders for the Neo could fall by 50 per cent after the initial surge of interest inevitably wanes.
EADS' reputation has also taken a knock in Asia. Earlier this month, Singapore Airlines and Qantas Airways found cracks on wings of their A380s, the world's biggest passenger jets. Neither Boeing nor EADS can afford mistakes in this part of the world, as Asia is the growth area that is taking up the slack in the slowing, more mature European and North American markets.
There is an important difference in outlook between the two groups that could have long-term repercussions for their duopoly. Boeing is run by misty-eyed principle, EADS by pragmatism. Nowhere is this clearer than in the duo's long-running World Trade Organisation (WTO) dispute that has been fought out through US and EU officials.
In 2004, the US launched a case regarding loans made to Airbus, which the EU countered with its own claim.
Both were found to have been subsidised to some extent; both Boeing and EADS have declared victory. Their claims are hard to assess, as WTO decisions are confidential, and even when leaked are so fiendishly complicated that losing parties can easily spin the line that they have been vindicated.
However, privately EADS would like to settle. The group fears potential rivals from China, Brazil, Canada and Russia could eat into their market – particularly as those companies will possibly receive their own forms of state aid – while Boeing and EADS throw money and resources at legal battles. China's Comac is particularly vocal in its intentions to become the market's third significant player through the C919, due to take flight in 2014.
For Boeing, the dispute is a matter of honour. Even when the battle seems close to an end, as it did early last year when the WTO issued its final report on the EU's claim against the US, Boeing and Washington will not let it lie.
Just last month, US trade officials claimed the EU was failing to comply with WTO demands that subsidies to Airbus be eliminated. The WTO has brought in an arbitrator, but the US seems intent on demanding sanctions that could cost as much as $10bn a year.
Boeing's zeal cannot be underestimated. Last year, it finally landed the $35bn contract to build 179 aerial refuelling tankers to replace the US Air Force's existing, half-century old fleet. In 2008, EADS had defeated Boeing to the deal in partnership with Northrop Grumman. Boeing appealed the decision, arguing its nemesis' bid was supported by those alleged subsidies.
EADS considered its own appeal when the contract was re-awarded, but took the politic approach that this could result in the company being kept out of the world's most lucrative defence market. The importance to the US in having a domestic manufacturer build a military symbol of strength was demonstrated in the way Boeing boss Jim McNerney gushed at winning the contract. He said he was "honoured" to provide the tankers to the "men and women of our armed forces".
So expect Boeing to fight back hard this year, which is bad news for those employees in Bristol and Wales who need these huge orders to keep their jobs – and it is not just the competition that is a threat to their livelihoods.
Although EADS was formed out of an idea that originated with British Aerospace and Germany's DaimlerChrysler, there is no significant UK shareholding today. Perhaps this explains why Airbus decided this month to move part of its wing production on the A320 family of aircraft from Wales to South Korea, though the group promised workers will be redeployed.
Much like the eurozone, the UK seems isolated in this pan-European empire. The parallel goes further: just as the UK economy is entwined with the fortunes of the eurozone, so a large chunk of our manufacturing depends on EADS' continuing success over a resurgent, resilient Boeing.
Hand over: Enders to succeed Gallois
The most open secret in European industry is that Louis Gallois, the 67-year-old EADS chief executive, will be succeeded by Airbus boss Tom Enders (left) later this year. However, politics is preventing a formal anointment.
The pair were co-chief executives until 2007, maintaining a Franco-German balance. However, it was decided that the company needed a sole vision, so Mr Enders stood aside on the virtual guarantee he would take charge five years later.
Although the new teamsheet has more-or-less been finalised, the French and German governments are vetting appointments to ensure the balance of power is maintained. They will have to come to a decision quickly, as the appointment must be finalised before a general council meeting in May.
A skilled political operator with a civil service background, Mr Gallois has been a towering presence for EADS. But he does not rule out staying on, which means that the second most open secret is that Mr Gallois will serve on Mr Enders' reconstructed board.Reuse content