By Scott Hamilton
Sept. 7, 2021, (c) Leeham News: My book, Air Wars: The Global Combat Between Airbus and Boeing, is now available on Amazon.
Three years in the making—delayed by the need to include the Boeing 737 MAX crisis and the impacts of Coronavirus—Air Wars is a combination of a biography of John Leahy and the 1982 book, The Sporty Game. The Sporty Game was considered the definitive book about the competition between Boeing, McDonnell Douglas and the young Airbus.
Leahy worked for Airbus for 33 years, 23 of them as the chief commercial officer for the company. Throughout executive turmoil at Airbus, and at Boeing, Leahy was the one constant salesman. Boeing officials were slow to recognize the threat Airbus and Leahy presented. The wake-up call, according to a top Boeing salesman at the time, was the 1992 order from United Airlines for Airbus A319s and A320s. United considered the airplanes superior to the 737-300/400. The order prompted Boeing to develop the 737 NG. From there, the global combat became a “bare-knuckle brawl,” as journalist Dan Catchpole put it this week.
Executives and salesmen from Airbus and Boeing were interviewed for Air Wars. So were industry leaders. My own archival resources and reporting were used as well.
The result is a book that describes the successes and failures of Airbus, Leahy, and Boeing. It describes how Bombardier came out of nowhere to become a threat initially dismissed by Boeing—but recognized by Airbus. Air Wars describes the sales campaign that launched the A380 and killed the proposed 747-500/600—but led Boeing to the 787.
Air Wars begins with the crucial sales campaign with American Airlines that led to the decision by Boeing to launch the re-engined 737 program—which later was branded as the 737 MAX. The book also dispels the myth that Boeing was hasty in designing the re-engined 737.
Many untold stories are in Air Wars, including sales campaigns, product strategy decisions and personal anecdotes about Leahy—including how McDonnell Douglas tried to recruit Leahy from Airbus in the early 1990s.
A synopsis of the book is below.
Read how Scott Hamilton came to tell the story of Air Wars, John Leahy, the strategies of Airbus and Boeing, and the Global Combat between them.
From Allan McArtor, former president of Airbus Americas, airline executive, and administrator of the Federal Aviation Administration.
The set-up of the global competition between Airbus and Boeing.
Airbus wanted to re-engine the A320 family. Boeing leaned toward developing a new airplane to replace the 737. This chapter tells how Airbus gambled that the A320neo would force Boeing into re-engining the 737 instead. It was a gamble that John Leahy had to persuade the Airbus CEO and Board of Directors to take. For Boeing, the re-engined 737 was branded the MAX.
This chapter introduces the early year of John Leahy.
After college, Leahy applied to American Airlines for a finance job. Rejected, he applied to general aviation manufacturers. Piper hired him, where he made his mark in financing and marketing.
In the process of transferring with Piper to Europe, a headhunter instead convinced Leahy joining Airbus was the better choice. Leahy’s first assignment was to close a major deal with Pan American World Airways. Sales campaigns with Northwest Airlines and others followed, some successfully, some not.
By the 1980s, Boeing dominated the jet age since its dawn in the 1950s. Conservative and convinced Airbus was another European jobs program, Boeing was unwilling to take big risks. As the upstart, Airbus was more than willing to take high risks for high rewards.
By the 1990s, Airbus produced the A300/A310 and A320 families. McDonnell Douglas was down to the MD-80, the final years of the DC-10, and the new MD-11. Boeing had a successful family of airplanes with the 707 through the 767. Now, Airbus launched the medium-range A330 and the long-range A340. Boeing countered with the 777-200 in another face-off.
By the mid-1990s, McDonnell Douglas Corp. slipped to No. 3 behind Boeing and Airbus. In a move that could have changed dynamics, MDC tried to recruit John Leahy to become the chief salesman for Douglas Aircraft Co. Imagine how things might have changed had Leahy joined MDC and later moved to Boeing with the 1997 merger between Boeing and MDC.
Despite Airbus’s growth Boeing didn’t take Airbus or Leahy seriously until United Airlines rejected the 737-400 in favor of the A320 and A319 in a 1992 sales campaign, breaking Boeing’s monopoly at UAL. It was a stunning wake-up call for the Seattle company.
Learn how Airbus defeated Boeing for the launch order of either the A380 or the 747-500/600.
Boeing lost launching the 747-500/600 but it had something better in mind, a concept called the 7E7, which became the 787.
Despite ostensibly being one company, Airbus in reality was several companies. An industrial snafu on the A380 blew up the uneasy alliance and led to executive office turmoil.
Lulled by Boeing’s failure to launch the 747-500/600 and fanciful Sonic Cruiser, neither Airbus—nor Leahy—took the 787 seriously. But a response was needed, and Airbus created the A350. Except the first, second, and third versions met with yawns from the market. Even the final version, the XWB, missed the mark.
Development of the 787 was a moonshot in international industrial design and snap-together production. It all began falling apart even before the rollout of the first airplane on July 8, 2007 (7-8-07). Things went downhill from there.
Increasing outsourcing enraged Boeing’s IAM 751 labor union. It struck for 57 days beginning in September 2008. CEO James McNearny had enough. He was determined to weaken the union, even if he couldn’t break it entirely. Thus began a series of battles that ended five years later.
While Airbus and Boeing were duking it out, tiny Bombardier, a regional jet manufacturer, made the bold gamble to develop a mainline jet that attacked the lower end of the Airbus-Boeing single-aisle sector. At the time, no one could foresee the consequences.
As with Boeing, Airbus debated internally whether to pursue a new airplane design to replace the A320, or to re-engine it. If re-engined, with what? An open rotor? A conventional engine? Despite popular belief, Pratt & Whitney’s Geared Turbofan was the mover, learn how CFM and the LEAP engine signed on first.
It was well known at the time Boeing had two options when it came to a new single-aisle airplane: a new design, which was favored, or re-engining the 737. The latter was put on the shelf in the expectation that Boeing would choose the former. When Airbus was ready to win a huge order from American Airlines (Chapter 1), Boeing responded within 48 hours with what became the MAX. In light of later allegations following two MAX accidents that Boeing rushed the design, the reality is different.
Two near-disasters involving fires on the 787 led the Federal Aviation Administration to ground the airplane for three months while a fix was developed.
The Airbus A350-1000, in a slightly modified design, would render the Boeing 777-300ER obsolete. Boeing had to develop a response. Rather than creating another new airplane at a time when the 787 program was still finding its legs, Boeing chose to proceed with a derivative of the 777, the 777X.
Having dismissed the threat posed by the Bombardier C Series, Boeing woke up in 2016 following a near-miss at United Airlines and an unrelated victory for Bombardier with Delta Air Lines. Boeing filed a trade complaint with the US Department of Commerce, charging Bombardier with price dumping. In the hyperbolic filing, Boeing claimed that if left unchecked, Bombardier would destroy Boeing and the entire US aerospace industry. The irony: if left alone, Bombardier may have gone into bankruptcy. Because of the trade complaint, Bombardier sold the C Series program to Airbus, strengthening its single-aisle product line.
While the trade complaint was underway, Boeing and Embraer agreed to create a joint venture, in which Boeing would own 80% and control through the management and the Board of Directors. The JV would help develop Boeing’s New Midmarket Airplane and a new family of single-aisle jets.
With the A380 a sales failure, Airbus was nevertheless loath to give up on the airplane without one last try. Boeing, meantime, recognized at long last its queen of the skies, the 747, had become an old spinster. Boeing debated as far back as 2008 whether to kill the program then, recognizing in 2004 that the 777-300ER was the beginning of the end for the airplane.
Boeing began debating internally in 2012 what its next new airplane should be. The names were variously the Middle of the Market airplane (MOM), New Light Twin (NLT), New Small Airplane or New Single Aisle Airplane (NSA), or the New Midmarket Airplane (NMA). But officials couldn’t make up their minds.
By the first quarter of 2019, Boeing was flying high. The stock price was at record levels. Profits were in the multi-billions of dollars. Shareholders were reaping dividends and from stock buybacks. Even the October 2018 crash of a five-month-old 737 MAX was no more than a blip. Then, a second new MAX crashed. Regulators around the world grounded the airplane for what was thought would be no more than a few months at most.
Over the years, Airbus and Boeing were beset by scandals. The effects would last for years to come.
In March 2020 a mysterious new virus that originated in China became a global pandemic. The commercial aviation industry was decimated, affecting Airbus, Boeing, Embraer, and the entire supply chain. These effects still are being felt.
Leading up to January 2018, several key leaders at Boeing had retired. That month, after 33 years, John Leahy also retired. At the end of his career, he and his sales teams sold more than $15 trillion worth of aircraft. His long tenure in sales was unmatched by anyone.