Europe’s aircraft

Press, 12 January 1977, Page 12

Europe’s aircraft

By

ANDREW WILSON,

in London

There is little doubt that 1977 will be a year of decisions determining the pattern of the Western world’s aircraft industry for the whole foreseeable future. These decisions will determine whether European air-craft-makers set up a unified “European” industry or, firm by firm and country by country, enter into joint ventures with the giants of the United States west Coast—Boeing, McDonnell-Douglas and Lockheed, There are three main types of commercial aircraft on which discussions are now concentrated: 1. A 180-220 seat plane using either three medium-sized engines or two giant ones. 2. A smaller 150-170 seat plane using two mediumsized engines. 3. A so-called “feeder” airliner with 90-110 seats. These, it is everywhere accepted, are the three types of plane with the maximum immediate commercial potential, and represent a market up to 1986 worth about $60,000M. A pure “European” solution. favoured by some political and industrial circles, would seek to win orders in the first category of plane with a scaled-down development of the existing European Airbus, known as the A-300 B. Such a plane would be developed and built by the existing Airbus partners — French, German, Dutch and Spanish — plus (hopefully) the new State-owned British Aerospace Corporation. There is no such exclusively European contender in the second, middle-sized plane market; but both Britain on one hand, and

Germany and the Netherlands on the other, have designs for a "feeder” plane that could usefully be combined. What clouds the European dream, however, is that during last year an increasing number of European firms, with government backing, have started nibbling at carrots being offered from across the Atlantic. The process started with the announcement in July that the French Government had decided to back a FrancoAmerican contender for the "mid-size” market. If plans go ahead this will be a joint development with McDonnellDouglas of an enlarged and improved version of the existing French Mecure airliner. The British Government has since let it be known that it favours exploration of a possible British share in the development of a Boeing contender for the same market, the so-called 7N7, which would be offered to airlines with a choice of either American or British engines. Nor is this all. Britain has also indicated — and Boeing has confirmed the possibility — of British aircraft-makers collaborating in the same firm’s contender for the 180-220-seat market (a rival to the scaled-down Airbus) — the 7X7. Other possibilities include British collaboration with Lockheed in a smaller version of the present Tri Star and American participation in the British “feeder” airliner project, the HSI24. The British Government would like to complete its choices and get matters settled "in principle” by about April. But if only because of the legislative delays in the nationalisation

of the aircraft industry, the process could well take longer. In the meantime, the prospects for a unified European industry appear to be diminishing, both in Britain and tn France. The reason is simple: for even if Europe were to capture a slice of the Third World plane market in addition to its own internal market, it would still not break even commercially — except, perhaps, on the small “feeder” plane. The American industry, on the other hand, has a virtual monopolv of the huge American domestic market, with the result being that production runs for European aircraft are typically a fifth or less of those for American planes, with consequently higher costs. What started as an apparently simple choice between “going European” or "going transatlantic” is thus becoming a much more sophisticated exercise in how to combine elements of both. For in order to sell the product of their skills in America, European aerospace firms have clearly to establish American connections, while at the same time securing a real share in development woi'k, which they can only do if Europe retains an independ ent capability in case of need Optimists believe that Europe is strong enough to secure fair bargains, and that American plane-makers have the foresight to see that true partnership (as opposed to mere sub-contracting) is essential not only to the health of technology, but also to continue co-operation in security and defence. The New Year will show wh.ether they are right.— O.F.N.S. Copyright.