In the fourth quarter of 2004, Boeing’s earnings were down 84 percent; in dollars, that’s $186 million this quarter compared with $1.13 billion in the same period a year before! The Chicago Tribune attributed this to the collapse of a tanker contract with the Pentagon and the closing of the 717 production line (February 3). In response to this downturn, Boeing made a tremendous effort to wax eloquent about how positive things have been this year and about its high expectations for next year. Curiously, the media jumped on board.
These negative numbers were then offset by press releases about Boeing’s new deals for plane orders from Japan Airlines. There were also a couple of rosy pieces about renaming the 7E7 Dreamliner the 787 Dreamliner (the impact this will have on sales is incalculable). Even Ethiopia chipped in with a commitment to purchase up to 10 7something7s.
If we believe the spin we are reading, Boeing’s profit woes this quarter were caused by a unique set of circumstances that won’t be easily duplicated; therefore, Boeing is on the way up. Of course, anyone who has followed Boeing closely over the last decade knows the problem is more fundamental than one tanker contract or a single production line outliving its usefulness. The reality is this: Boeing isn’t on top anymore.
A decade ago, Boeing’s main competitor, Airbus, controlled 18 percent of the global market for commercial jets; today, it is triple that—54 percent. Boeing, once clearly the juggernaut of the aeronautics industry, has tumbled in the worldwide market.
On the positive side though, Boeing’s public relations division seems to be doing quite well.
For more on the edge Europe is gaining over the U.S. technologically, see our December 2003 article “Space Wars!” under “Issue Archives” at www.theTrumpet.com.