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Airbus-Boeing spat flies on
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July 28, 1999: 11:16 a.m. ET
Jet makers end uneasy truce to trade barbs over airliner swap deal
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LONDON (CNNfn) - The uneasy truce between the world's largest jet aircraft builders threatened to boil over Wednesday after Europe's Airbus Industrie accused arch-rival Boeing of "breaking established market practice".
The Seattle-based aerospace group has been under fire since agreeing to buy 17 nearly new Airbus A340s from Singapore Airlines (SIA) last month in return for an order for 10 new Boeing 777 long-range aircraft.
Aircraft manufacturers routinely offer a range of price and service incentives to customers, including trading in older aircraft. The SIA deal was notable for the number of aircraft involved and the fact that some had not even been delivered.
Airbus has steered clear of threatening to restart the two-year price war that wiped out profits at both companies, despite booming demand for large jet airliners.
However, it promises "to make life as difficult as possible" for its U.S. rival if Boeing seeks to place 14 Airbus A340s with other airlines. Three more A340s destined for SIA and valued at around $150 million each are included in the Boeing deal.
Airbus said it may drop training and maintenance packages attached to the SIA A340 fleet and worth millions of dollars to any airline buying the aircraft. Boeing has said the deal could cost it up to $200 million.
However, the SIA transaction strengthens Boeing's position in the Asian airline market, which is just recovering from the region's financial turmoil of the last two years. Both manufacturers saw hundreds of millions of dollars in orders canceled as airline traffic tumbled in what had been the fastest-growing in the world.
The Boeing 777 and A340 compete in the same market for long-haul routes such as those across the Pacific. However, while the two companies have been battling neck and neck in the global market, the 777 has outsold the A340 by a margin of four-to-one in Asia.
Insiders said that while the manufacturers would miss no opportunity to maintain their war of words, the dispute could reach an amicable settlement. The terms of the SIA deal require Boeing to take the aircraft only if SIA cannot find a willing buyer.
SIA, the most consistently profitable Asian airline, has a stake in an aircraft leasing company that gives it an edge in placing the A340s. Ironically, the lessor is based in Seattle.
SIA and Boeing declined to comment further, other than to say that there was nothing unusual about their deal in the context of a competitive airliner market. 
-- from staff and wire reports
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Airbus Industrie
Boeing
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