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View from City Road: Airbus flies ahead of the opposition

If ever conclusive evidence were needed that Airbus Industrie has arrived, it came yesterday from, of all quarters, the rival commercial aircraft manufacturer Boeing.

For the past 20 years Europe has been struggling to catch up with the US in the business of making airliners. Now the US is struggling to keep pace with Europe.

That much was not just implict in yesterday's confirmation from Boeing that it plans to launch a new family of 737 jets - it was bluntly stated.

Although it was inevitable that the 737, the world's biggest selling aeroplane, would have to be renewed at some stage, the reason it is happening now is that the Airbus A320 family of jets has been stealing Boeing's thunder, and its markets, with increasing success.

This steady encroachment was best illustrated last year when Airbus snatched a pounds 1.3bn order from United Airlines from under the nose of Boeing.

The A320 family is technically superior to the 737. It is also slightly bigger and faster and travels further. So it is no coincidence that the new generation of 737s will have increased range, seating capacity and speed, a new engine, greater fuel efficiency and lower engine emissions. Imitation is, as they say, the sincerest form of flattery.

Not that the Europeans have any cause for complacency. Firm orders for the A320 family stand at 817 whereas, at the last count, the 737 order book stood at 3,046. If Airbus can even begin to approach that record it will be doing well.

With demand for 737-sized jets forecast at 4,000 between 1997 and 2010, the market is clearly large enough to accommodate two manufacturers. But, as Boeing's announcement yesterday demonstrates, it can only get more competitive - which is good news for airlines and, ultimately, their customers.