Airbus: From Challenger to Leader

Airbus seemed all set to take market leadership in the low cost segment from Boeing for the first time. From the mid-1990s onwards, Airbus had steadily increased its market share. By the late 1990s, Boeing and Airbus had an equal share in the market. Rival Boeing accused Airbus of resorting to heavy price cutting in order to beat off the competition. It also accused Airbus of producing aircraft for which it had not received orders and creating a glut in the market. But Airbus rejected the allegations saying that it was in the market to make money and not to buy market share. Some analysts were of the opinion that Airbus was able to increase its marketshare because of the financial support it received from its consortium partners. However, others attributed Airbus' success to its fuel-efficient jets, which were economical to run.

At that time, American manufacturers dominated the global aerospace industry and European aircraft manufacturers were unable to compete with American players. The big three of Europe - Britain, France and West Germany - came together to salvage European pride and industry. Due to differences with the other partners, Britain quit the project in July 1967, and in 1970 the Airbus Project was reorganized and named Airbus Industrie, a Franco-German company under French law. In 1971, Spain joined the consortium with 4.2% stake through state-owned Construccciones Aeronautics S.A (CASA). Initially, Airbus had its headquarters in Paris; in 1974 the headquarters were shifted to Toulouse (France).