Take Flight with Aviation Coverage

By Leslie Wayne
January 14, 2008 10:24 AM

The excitement of aviation translates well into business journalism. Besides the romance of the skies, aviation journalism is dominated by one of the most fascinating corporate match-ups: The ongoing battle between two global giants, Airbus and Boeing.

There are so many layers to this story - a European government-created company against a venerable American institution, executive suites on both sides of the Atlantic roiled by turmoil and technological marvels offered up in billion-dollar battles for domination of commercial aerospace.

Business stories hardly get better than this. And right now is a great time to be covering the industry. Aviation, however, hardly gets covered in the journalism classroom, so what follows is an aviation primer on the critical issues facing the two companies today - with the hope of encouraging business journalists to take flight into this area.

At the moment, Boeing is about to introduce its new 787 Dreamliner, the most successful new plane in aviation history. It is so popular that there is a four-year backlog in orders. Over $100 billion worth of 787s have been ordered from 50 different airlines - over 700 planes in all.

The 787 is a technological marvel and, so far, a business home run. If the word "plastics" is not the first thing that comes to mind when thinking about airplanes, think again. The 787 Dreamliner is using lightweight composites - stronger than titanium, lighter than aluminum - in over half the plane. This makes it more fuel-efficient and can help airlines save money on landing fees, which are determined by weight.

The 787, which will seat between 200 and 300 people, is a bet-the-ranch effort by Boeing. Not only will the plane have bigger windows (including one in the bathroom), it will contain more humidity, helping passengers feel more refreshed upon arrival.

The new plane is a reflection of Boeing's belief that the future of aviation is in wide-bodied, mid-sized jets that can take passengers from one point on the globe to another, nonstop. It is also the airline's first new commercial plane in decades. For Boeing, the 787 is the corporation's "comeback kid." The terrorist attacks of 2001, depressed demand for new airplanes overall and Boeing, until it came up with the 787, was saddled with an aging product line, causing the company to lose market share to rival Airbus.

Airbus is not one to take the 787 threat lightly. It has also bet the ranch -- and what an immense ranch it is. Airbus is just beginning to ship out its "superjumbo" A380, the biggest plane in the skies. Enormous doesn't begin to describe the A380. It is a double-decker plane - almost like one plane on top of the other, and far larger than Boeing's venerable 747. The A380 will typically seat around 500, but can be configured to take on as many as 800 passengers.

Airbus sees the future of aviation differently than Boeing. It believes that airlines will continue to employ a "hub and spoke" system in which smaller regional flights will feed into big long-haul planes like the A380. For instance, a person might fly from Salt Lake City to Los Angeles on a mid-sized plane before boarding an A380 for a flight to Tokyo. At $300 million per A380, Airbus forecasts that there will be enough trans-oceanic demand for this giant craft. By contrast, Boeing sees a far smaller market for big planes and a bigger market for medium-sized planes.

Not just billions, actually hundreds of billions of dollars, are riding on these two different forecasts. While it is unclear which vision will prevail, the drama of it all makes aviation reporting special - the issues are global, the dollars are immense and, rarely, are the stakes more stark. And between equity analysts, trade magazines, aerospace conferences and aviation experts, there are plenty of sources to get to know and mine for stories.

Those interested in taking on this business topic should also be aware that both companies have stumbled in bringing their planes to market. Manufacturing problems with the complicated wiring system in the A380 lead to a two-year production delay. In part, because of this, top executives at Airbus were sent packing and new management was brought in.

For a while, it appeared that Boeing could do no wrong with the 787. But, before Boeing could begin to gloat, it too began to have manufacturing problems. In October 2007 Boeing announced a six-month delay in delivering the first 787 due to software problems as well as the inability of its suppliers to complete their work on time.

For journalists, the challenge of aerospace reporting is to master the technical aspect of aviation, get immersed in the business strategy, meet the key players and then, fasten your seatbelt. This is a corner of journalism where the sky is literally the limit and there are exciting stories to be found from Seattle to Singapore - and many points in between.

Leslie Wayne is a business reporter for The New York Times.

*Photo: The Boeing production line is full for the all-new 787 Dreamliner. Image courtesy of Boeing.

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