As widely expected, Boeing's (NYSE:BA) 787 will not take to the skies unchallenged. Airbus disclosed late last week that it will build the A350 -- its answer to Boeing's newest commercial airliner. Boeing's protests against Airbus' government support may have stymied the launch of the European firm's plane, but Airbus' tactics are leaving Boeing with less and less room to maneuver.
Airbus previously indicated it would seek launch aid from European governments for the A350, a development that brought vociferous complaints from Boeing and spurred the U.S. case -- before the World Trade Organization -- against Europe's trading practices. Airbus still has not ruled out pursuing aid. Surprisingly, though, Boeing appears to be taking the whole situation in stride.
One of the reasons for Boeing's seeming acquiescence may lie in Airbus' global sourcing strategy. The European company recently offered Russia's aerospace industry as much as a 3% stake in building the A350. In December, Airbus reportedly offered a 5% stake in the jet to Chinese companies. Granted, Airbus is, in a sense, following Boeing's lead by divvying up work on the aircraft to different countries -- large chunks of the 787 will be built in Japan and Italy, for example. Spreading the work around helps to hold down the exorbitant cost of launching new planes.
However, by offering other countries a piece of the A350, Airbus is also recruiting allies. Airbus' parent, the European Aeronautic Defence & Space Co., has already shown its astuteness in currying the right relationships to further its goals. EADS' alliance with American outfit Northrop Grumman (NYSE:NOC) to compete with Boeing for the U.S. Air Force's tanker refueling contract doubtless has strengthened EADS' competitive position.
In the case of the A350, Airbus' partnerships with Russia and China may help mute U.S. criticism of European subsidies. If the U.S. is seen as impeding the A350, this could stir strong protests from Russia and China, two countries with significant influence on U.S. policies.
Boeing's ability to use political channels to restrict its rival's moves appears to be growing more limited. In the case of the 787 and the A350, the market will decide which plane wins. Fortunately for Boeing, the 787 is a very strong candidate.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
