European Consortium Creates Airbus Industrie Summary

  • Last updated on November 10, 2022

Airbus Industrie was founded by a consortium of European aviation companies to allow the European airline industry to compete with U.S. airline companies rather than with each other. As a result, European nations produced aircraft that were able to compete with their U.S. rivals.

Summary of Event

By the 1960’s, American-made aircraft dominated the skies over Europe. European commercial carriers such as Air France, Lufthansa, and British Airways all wanted to use European products, but no European aircraft could match the airliners turned out by Boeing, Boeing Lockheed, Lockheed Aircraft Corporation and McDonnell Douglas. McDonnell Douglas[Macdonnell Douglas] Those companies were producing a new generation of aircraft, wide-body planes such as the Boeing 747, the Lockheed L-1011, and the McDonnell Douglas DC-10. Those aircraft all featured three or four large engines and were designed for cross-U.S. or transoceanic flights and thus were not suitable for the shorter routes flown in Europe. Airbus aircraft Airline industry, European Aircraft;manufacturers [kw]European Consortium Creates Airbus Industrie (Dec. 18, 1970) [kw]Airbus Industrie, European Consortium Creates (Dec. 18, 1970) Airbus aircraft Airline industry, European Aircraft;manufacturers [g]Europe;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [g]United Kingdom;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [g]Germany;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [g]France;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [c]Space and aviation;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [c]Manufacturing and industry;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [c]Transportation;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] [c]Engineering;Dec. 18, 1970: European Consortium Creates Airbus Industrie[11080] Beteille, Roger Kracht, Felix Ziegler, Henri Strauss, Franz Josef

In 1966, the executives of Air France, Lufthansa, and British Airways met in London to discuss their needs. They concluded that since American manufacturers were not going to build an aircraft that suited them, they would build one themselves. The smaller size and resources of European aircraft manufacturers meant that no single company, or nation, could afford the research and development costs for such an ambitious undertaking. Instead, the European companies sought to pool their resources and form a consortium, then obtain government subsidies from European taxpayers. The governments of France, West Germany, and Great Britain agreed to contribute $1 million each toward an initial study on a new aircraft. Roger Béteille, chief engineer of France’s SUD-Aviation, SUD-Aviation[SUD Aviation] was chosen to head the effort.

Béteille started work in July, 1967. He visited American carriers and manufacturers, looking for ideas and responses. He wanted a dual-engine, wide-body aircraft capable of being handled by a two-person crew, unlike the standard American design necessitating a three-person crew. Designing the cockpit for two crew members proved to be an important move. Within a few years, virtually all Airbuses used only two pilots, although from the outset a third seat was placed in the cabin for companies that wanted a larger crew. The wings would feature vertical tips for stabilization. By September, 1967, the German, French, and British governments had signed a memorandum of understanding to begin development of the 300-seat Airbus A300.

The consortium focused on ways to cut costs while still using state-of-the-art computers and mechanical systems that would keep the Airbus on the cutting edge of technology for years. Most important, the consortium used innovative management tools to unite the multinational team; for example, only American aerospace jargon was permitted in planning sessions attended by representatives of all the partners. In Béteille’s view, that eliminated many of the problems associated with the Concorde, Concorde (supersonic aircraft) the world’s first supersonic airliner, which had been produced through the first joint European airline program but for which no consortium had been developed. In the Concorde project, for example, a French official (who spoke English) refused to answer memos or queries except in French. Ultimately, Béteille’s team came up with a design for an aircraft that could carry three hundred passengers, called the A300. Béteille appointed Felix Kracht, a German executive, to manage production of the A300.

No sooner had the design for the A300 been completed, however, than problems developed with the engine bidders. The team hoped to use British manufacturer Rolls Royce, Rolls Royce company but that company was focused on making an engine for Lockheed’s L-1011. In addition, Rolls Royce quoted much higher prices to the Airbus consortium than it did to other manufacturers. Béteille had to choose between a complete redesign of the aircraft to use an existing General Electric (GE) engine (thus risking the loss of the British engine manufacturer Rolls Royce) and paying significantly higher prices than Lockheed, putting the A300 at a cost disadvantage. Béteille ordered a secret redesign to accommodate the GE engines, convinced that he could keep the British in the consortium without Rolls Royce. The British government pulled out when the decision was made public, but all the other partners remained, including the British company Hawker Siddeley.

An Airbus 300, the first airplane manufactured by Airbus Industrie.

On December 18, 1970, the remaining team members formally incorporated Airbus Industrie Airbus Industrie (AI). By then, it consisted of the French concern Aérospatiale Group Aérospatiale Group (the merger of Nord- and Sud-Aviation), VFW-Fokker VFW-Fokker[VFW Fokker] (the German part of the Dutch firm Fokker-VFW), and the German company Messerschmitt-Bölkow-Blohm Messerschmitt-Bölkow-Blohm[Messerschmitt Bölkow Blohm] (MBB). MBB then founded Deutsche Airbus Deutsche Airbus as a means of financing the Airbus program, and Bavaria’s minister of state, Franz Josef Strauss—who had supported the consortium and its goals from the outset—headed its board of directors. Henri Ziegler, former head of SUD-Aviation, became its AI’s first president, and Béteille was its managing director. The team wanted to keep as much of the production in Europe as possible. It handed out subassembly work to various European manufacturers: wings to Hawker Siddeley, Hawker Siddeley rear fuselage to Messerschmitt, door and tail to Spain’s CASA CASA (Spanish aviation firm) (which joined the consortium in 1971), wing segments to VFW-Fokker, and final assembly to SUD-Aviation. The maiden flight of the A300B took place on October 28, 1972. Following successful series of tests with four prototypes, the aircraft was certified by German and French aviation authorities on March 15, 1974. The consortium started to sell the aircraft on the basis of its low cost, two-person crew, and fuel savings resulting from the dual-engine design.

The Airbus team could not match Boeing or Lockheed for maintenance staff already in place. Initial sales went slowly, and even with arm-twisting and subsidies from the French government, by 1975 Airbus had orders for only thirty-two aircraft. By the eighth year of the project, the French government alone had poured $400 million into the company and had only a few dozen sales to show for it. In 1977, the financially strapped company turned the corner with a sale to Eastern Airlines. Béteille leased four Airbuses to Eastern for $1 a year. The airline soon purchased twenty-eight additional planes, and by 1979 total orders exceeded one hundred.

At that point, the company moved toward other designs, including the larger A310, a short-haul competitor to Boeing’s 747. Boeing 747[Boeing seven forty seven] The French government supported the consortium with $1 billion, and shortly thereafter the British government rejoined the team. Essentially a modified and stretched version of the A300, the A310 made its debut in 1982, in the middle of a European and American recession. The A310 sold only 156 units by 1987. Airbus already had started design work on a third jet, the A320, a 150-seat, short-haul aircraft aimed at capturing routes of three hours or less. It would feature a fully computerized piloting system and compete with Boeing’s 737. To make the technological leap, the consortium requested yet another advance from the French government of $2.5 billion.

The A320 design marked a significant technological advance, doing away with one-third of the instruments and the traditional “yoke” type steering well, which was replaced with a joystick like those used in fighter planes. Television displays replaced the usual maze of gauges. Designers also separated the hydraulic systems, avoiding potential calamities such as those that had plagued the McDonnell Douglas DC-10. The consortium sold almost twice as many A320’s as it had A310’s, with 294 firm orders, plus options for 182 more aircraft, between 1981 and 1988.

By 1987, riding the success of the A320, Airbus requested an additional $4.5 billion to produce a true wide-body, long-range aircraft capable of competing with the DC-10, the L-1011, and the 747. The A320 received its certification on February 26, 1988, and began service for Air France two months later. By the fall of that year, Lufthansa had placed the A320 in service. A new era of computerized aircraft had arrived. During the 1990’s and early 2000’s several Airbus craft saw their first flights: the A340, A330, A321, A300-600ST (the Beluga, a supertransport aircraft), A319, A340-600, A318, A340-500, and the A350 among them.

In the meantime, Boeing and several European aerospace companies—including Dasa, Aérospatiale, CASA, and British Aerospace—were conducting a study on the development of “very large commercial transport aircraft” (VLCTs), which concluded in July, 1995, that they were technically feasible but questionable commercially. As the industry continued to watch the market for the viability of VLCTs, AI was transformed in 1997 from a consortium of four partners to a single corporation, eventually becoming Airbus Integrated Company in 2001.


Airbus created the first viable European challenge to U.S. domination of the commercial airlines industry. In 2007, as it rolled out its behemoth A380—a four-engine, double-deck, four-aisle behemoth with a seating capacity of up to 853—it became clear to the general public what those inside the industry had known for some time: Airbus posed a significant challenge to the U.S. industry giants and indeed, had surpassed them. The informal military-industrial alliance of U.S. defense and the big three U.S. manufacturers—Boeing, Lockheed, and McDonnell Douglas—had finally met its match in the successful European consortium cum corporation. Airbus aircraft Airline industry, European Aircraft;manufacturers

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Aris, Stephen. Close to the Sun: How Airbus Challenged America’s Domination of the Skies. Chicago: Agate, 2004. A former British Airways CEO descibes this riveting book, with its examination of the rivalries and deceit involved in the airline saga, “an engrossing story.” The author is a veteran business journalist.
  • citation-type="booksimple"

    xlink:type="simple">Newhouse, John. Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business. New York: Knopf, 2007. An update of the author’s 1982 study of the aviation industry, The Sporty Game, in which a writer for The New Yorker attempts to sythesize many issues, from international sensitivities to cost overruns, the U.S. airline crisis, purchase negotiations, engine mechanics, government subsidies, the economics of plane size, and the materials and engineering of wings. Concludes that both firms will capture a near-50-percent market share and both airlines and public will benefit.
  • citation-type="booksimple"

    xlink:type="simple">Norris, Guy. Airbus A380: Superjumbo of the Twenty-First Century. St. Paul, Minn.: Zenith Press, 2005. An overview of the development, key players, technologies, and controversies surrounding this behemoth transport system, the largest commercial aircraft of all time. Includes two hundred color photos by Mark Wagner. Both Norris and Wagner work for the aviation magazine Flight International.

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