Telling the Airbus story requires returning to the 1960s and ’70s, when both the jet airplane market and passenger traffic were growing rapidly, and a host of new aircraft designs were on drawing boards and just entering service.
In the early 1960s, America dominated global commercial aircraft design and production. At the time, the US companies – primarily Boeing, Lockheed and Douglas – owned over eighty percent of the airliner market. Alarmed at the prospect of being frozen out of the industry, in 1965 ministers from France, Britain, and Germany – the home countries of Europe’s major plane builders – began meetings to strategize how best to respond.
With all the major US and European manufacturers contemplating new aircraft both large and small, it was hard to see how the Europeans would ever sell enough of these new planes to make money on them. The ministers feared their nations’ manufacturers would soon destroy their own finances by competing with both the Americans as well as each other, relegating them – if they survived at all – to collecting crumbs as sub-contractors to the American firms.
On the other hand, if the Europeans agreed to work together, success might come if they identified and filled a hole in consumer demand which the major US manufacturers had missed. It was crucial for the ministers that they make the right market call. They had one shot, a single all-in bet, and if they produced an airplane that did not sell exceedingly well, they were unlikely to find the money or public support to produce a second one.
Two years of intense discussions led to a Memorandum of Understanding, signed in London in September 1967, memorializing the ministers’ agreement ‘for the purpose of strengthening European co-operation in the field of aviation technology … to take appropriate measures for the joint development and production of an airbus.’ Airbus was a term then in vogue to describe the next broad category of passenger aircraft which would move large numbers of passengers cheaply – like a public commuter bus. Plus, its general meaning was recognizable in each of their languages.
The plane they agreed to jointly build actually created an entirely new market segment: the medium-range, twin-aisled, twin-engine, widebody jet. Formally announced at the 1969 Paris Airshow, no plane like it existed.
Until the Boeing 747, passenger planes had a single aisle running their length. Putting in two aisles called for a significantly wider fuselage – a wide body – meaning a heavier plane with bigger engines burning more fuel. But airline costs are not measured simply by how much fuel a plane consumes. The best cost measure is on an available-seat-mile basis, the cost of fuel – or any other cost – to move a single seat one mile (not the cost to move a passenger, but rather the seat, empty or occupied; airlines have per-passenger measures as well). A twin-aisle airplane would make economic sense if it carried more seats over longer distances for every gallon of fuel than a smaller single-aisle plane.
That was Boeing’s motivation for producing the long-range four-engine 747; ditto for the three-engine McDonnell Douglas DC-10 and the Lockheed L-1011. The Europeans decided their Airbus would apply that same principle to a two-engine plane.
The world’s first twin-engine widebody was dubbed the A300, in recognition of the number of passengers it was designed to carry. Placed in charge of taking the new plane from concept to reality were two Frenchmen and two Germans. From West Germany came a politician, finance minister Franz-Josef Strauss, and Felix Kracht, an aerospace engineer who during the Second World War had designed rocket-powered reconnaissance planes and now headed Deutsche Airbus, a consortium of German aviation businesses.
The French contributed Roger Béteille, a graduate of the elite École Polytechnique and also an aerospace engineer, who gets credit for coming up with the final design of the first Airbus, and Henri Ziegler, at the time in charge of SNIAS, Société Nationale Industrielle Aérospatiale – eventually simply Aérospatiale – the French aircraft manufacturing conglomerate.
Ziegler is a particularly compelling figure, not only because of his French-patriot background, but because, like Elmer Sperry, his son’s contributions were as important to the aviation industry as his own. We will come to Ziegler’s son, Bernard, shortly.
Born in 1906 in Limoges, Henri received undergraduate degrees in management and aeronautical engineering, and then joined the French Air Force in 1928. Rising to deputy director of the test flight center by 1938, at the outbreak of the Second World War he was sent to the US to procure aircraft and parts for the French battle against Germany.
After returning to France to help organize the Resistance, in 1944 he escaped to England, where he was first put in charge of the Free French Air Force, and then held senior general staff postings. Soon after the war ended he was made chairman of Air France, remaining there until 1954. Following a number of cabinet-level positions, in 1968 he became president of Sud Aviation, which two years later became SNIAS and then Aérospatiale.
By then white-haired, but still trim, he worked tirelessly on Airbus with his son Bernard and his French and German partners to create the plane everyone hoped would save Europe’s aviation industry.
As the A300’s design progressed, lack of interest by airlines combined with changing passenger market forecasts compelled the Europeans to shrink the plane down to 250 seats, but they kept the model number, now designating it the A300B. To formalize the process, Airbus Industrie GIE was officially created on 18 December 1970, owned 50/50 by Germany’s Deutsche Airbus and France’s Aérospatiale.42 Strauss, the German politician, was named chairman of the Advisory Board, while Ziegler was made managing director and chief executive officer in addition to his duties as president of Aérospatiale.
The next year Spanish aviation firm Construcciones Aeronáuticas SA (CASA) acquired 4.2% of Airbus, diluting the first two partners. Britain’s Hawker-Siddeley and the Netherland’s Fokker each contributed manufacturing capability to the effort, though they didn’t take ownership stakes. It had become a truly pan-European enterprise.43
The Airbus A300B entered regular passenger service with Air France in 1974. But although far more economical to operate than any of its competitors, it initially chalked up only a few sales. Then the industry got walloped by two seismic shocks. First came the 1970s energy crisis precipitated by the 1973 Arab-Israeli Yom Kippur War and the resultant Arab oil embargo. After that came intensifying industry competition culminating in the Airline Deregulation Act of 1978.
The changing environment drove airline managements to seek ways of operating more efficiently, leading Frank Borman, the former American astronaut who was president of Eastern Airlines, to acquire four A300Bs in December 1977 for a six-month tryout. Though terms of the deal were never made public, one industry official said, ‘As far as I understand it, the deal to Eastern represents a no cost deal to the airline.’ Free was a great price.
Borman was so happy with the plane’s operating costs that he ordered 23 of them, with an option for 25 more. That broke the logjam. From then on the A300B sold well, and Airbus was here to stay.
But the European consortium would not survive very long if it only manufactured a single plane model. It needed a family of jets, as Boeing now had with its 707, 727, 737 and 747 airliners. As a first step, Airbus first introduced the A310 in 1982, a slightly smaller but longer-range version of the A300B. Though a valuable fleet addition for some airlines, it wasn’t a game-changer. Airbus management needed to concoct a plane that would alter the aviation paradigm, forcing airline customers to see the company as a market leader rather than a follower.
That plane was the A320.