USA Today had a long article on the woes of Airbus only six months after the company was crowing about their "victory" over Boeing in last years sales race.

As the world braces for an explosion in air travel brought about by emerging middle classes in developing nations, Boeing in a few years could become the sole supplier of competitive midsize wide-body jets. The reversal of fortune for Airbus, which has led Boeing in total plane orders for five years, could knock Airbus out of competition with Boeing for years to come. That would allow Chicago-based Boeing to largely name its price in a market worth $35 billion to $50 billion a year.

That worries customers.

"We need the competition," says Doug Parker, CEO of US Airways, which flies more than 200 Airbus jets and has more on order.

Though there are only two major builders of commercial airplanes in the world, he says, "They're intensely competitive, and that's good for prices and technology development."

Critics of the Airbus superjumbo program are more blunt.

To develop a competitive midsize jet, "Airbus needs to reinvent itself," says aerospace analyst Richard Aboulafia of Fairfax, Va.-based Teal Group, who has followed the industry for 20 years. "The question is: When? When can they pay for it, and when can they find the engineering resources they'll need?"

I guess you have to party while you can, but I find it fascinating that the elite media is so gullible, basically reprinting press releases rather than actually investigating and reporting the real news (business news or otherwise...).

I'm no expert on aviation economics, but frankly it wasn't that tough to see from business travel trends and global economic development that the Airbus A380 is the wrong airplane at the wrong time. More people are flying, but they want to go to a far greater range of destinations than ever before. Airbus has had to concede Boeing's superior grasp of the industries market economics by finally acknowledging that the real competition is with the 787 Dreamliner. The 787 has considerably more flexibility than any other plane on the market with its enormous flying range, capacity and fuel efficiency. Simply put, if you buy a 787, you can use it on far more routes than anything else in the tarmac. Its a plane with a lot of tangible economies that can actually be measured which always makes it far easier to justify a massive capital expenditure of this type.

Streiff, who took on the top Airbus job July 7(what? Somebody got fired?), stopped short of officially launching the (A350)XWB program. He said he won't seek approval from Airbus' shareholders until October to give him time to learn the company.

Streiff is a veteran French corporate executive with no aerospace experience. It was unclear how Airbus will cover the estimated $5 billion cost of developing the new jet family.

Streiff's announcement came on the opening day of the Farnborough International Airshow near London. Airbus was under pressure to announce a new midsize jet at the prestigious industry show where airline industry leaders from around the world congregate.

Streiff acknowledged Airbus "is in the middle of a crisis." He expects the company to emerge "better than before."

Initial industry reaction was cautious. "It's a sound approach," said analyst Richard Aboulafia of the Teal Group in Fairfax, Va. But given the engineering and funding challenges, he said, "This is going to be a difficult road."

Damn right.

The real story here is why Airbus would make such an obvious and expensive error, and the answer is politics. The debacle earlier this year in which the A380 was cast as a symbol of European technical supremacy over the "cowboys" in the U.S.A.

The high point came one and a half hours into the show: The four statesmen, posing on steel scaffolding in front of the Airbus symbolically pushed a button christening the aircraft. With one touch, the A380 became visible under full light for the first time. Choir music filled the hall and the blitz of photographers' flash bulbs began. The company also unveiled its modern new logo on the plane's tail fin.

During speeches given before they took personal tours of the A380's interior, the leaders spoke of the importance of the project for European industry and unity. "The christening of the A380 is for all of us a moment of emotion and pride," French President Jacques Chirac said, describing the super jumbo as a "great success for Europe." He added that he hoped people would take that success and use it to help transform Europe into the world's "headquarters for technology."

In Britain alone, British Prime Minister Tony Blair said, in the long-term 100,000 jobs would be dependent on the A380 and 400 different companies would profit from it. The project could also help generate billions in export revenues for Europe. Blair also praised the environmental friendliness of the new aircraft, saying it would use 30 percent less fuel than comparable jets.

German Chancellor Gerhard Schroeder delivers a speech praising European innovation.
Gently playing off the American competition, Germany's Schroeder said the A380 example showed the advantages of "good old Europe." Traditions like cooperation, he said, fairness towards all employees of a company and social sensitivity had helped lead the company to success and major technological achievement. "Europe is still in a great position to set the tone of the future," he said

Er-r-r sorry about that, could you possibly see your way clear to extending us another 5 billion Euros credit line?