Two New Birds from Europe

European planemakers have stalled out while trying to intercept a larger share of the U.S.-dominated world market. The French sank $130 million into the Mercure mid-range commercial jet, sold only ten of them, and most likely will abandon the plane. A similar fate may well await the Concorde supersonic jetliner, on which much more British and French prestige is riding. Development costs have hit a frightening $2 billion, and the troubled plane's only solid customers so far are the state-owned airlines of the two countries financing it.

Despite these setbacks, however, Europe's planemakers are at last seeing a patch or two of blue sky. Last week the wide-bodied A300B airbus, made by a Paris-based multinational consortium called Airbus Industrie, went into commercial service on Air France between Paris and London. This week the ambitious MRCA (multirole combat aircraft), a joint project of Britain, West Germany and Italy, is scheduled to make its maiden flight in the skies above Munich. Both promise to offer stiff competition for American planemakers.

Sold Out. With the A300B, Europe's aircraft builders are offering greater passenger capacity in the high-density, short-to medium-range travel market now dominated by Boeing's 727 and McDonnell Douglas' DC-9--both smaller aircraft. If last week's flight was any harbinger, the European airbus will do well. All 251 seats (compared with a maximum of 163 on a U.S. 727) on the twin-engine plane were filled, and Air France reported that its first 30 flights to London were sold out. The line has also announced that it plans additional round-trip runs to Nice, Marseille and Algiers by July.

The A300B is holding its own in the stringently competitive sales arena, where salesmen have been known to press prospects with photos of their rivals' air crashes. A sales team for the Lockheed L-1011 was in Australia last week, but so too was one for the A300B. Its salesmen claim that the A300B is quieter than rivals and, even more enticing, uses roughly 23% less fuel per seat mile than a 727. So far, eight airlines--six from Europe, one from Thailand and one from Brazil--have ordered 22 airbuses, at $21 million to $22 million each; options have been taken on 25 more.

If the MRCA fighter-bomber interceptor gets off the ground nicely this week, it may also take some business from U.S. companies. The swing-wing, twin-engine plane can break the sound barrier at near treetop level (752 m.p.h. at sea level), then soar high into the stratosphere at more than 1,350 m.p.h. --and do all this while carrying an unusually heavy weapons payload. The plane is specifically designed to replace aging U.S. aircraft in the West German Luftwaffe and navy, the Royal Air Force and the Italian air force.

But severe misgivings have nonetheless arisen since the project was begun in 1968. Combined orders from the four customers have slipped from a planned 1,180 to 807--and could shrink more because of costly design compromises. The estimated cost of developing the plane was $1.8 billion. The British Labor government has resolved to review thoroughly the project with its West German and Italian partners before the next phase is authorized. But in British aviation circles at least, the plane is regarded as superior to such U.S. offerings as the F-15, F-14 and F5. Says a high R.A.F. officer: "The American planes are either heavier and more expensive or cheaper and less effective."

U.S. aircraft-industry executives do not view the new European entries as seriously diminishing their share of the non-Communist world's aircraft market; American planemakers hold 95% of the commercial market, which is expected to generate sales of $150 billion during the next ten years. But they do bemoan their lack of fresh ideas; nothing new was displayed by the U.S. at the 1973 Paris Air Show, which is considered the aviation showcase of the world. (Instead, U.S. aircraft companies simply revised existing designs.) Yet even with the A300B, the MRCA and many other entries by the British, the West Germans and even the Soviets, there is a feeling that the European industry is in need of organizational streamlining. Airbus Industrie, for example, is a consortium of companies in Britain, West Germany, The Netherlands, Spain and France. Each company builds components that are shipped to the Aerospatiale center in Toulouse, where they are finally assembled. The MRCA is built by Panavia of Munich, jointly owned by the British, West Germans and Italians. But the work is divided according to each country's share. Thus Britain builds 42.5% of the airframe, West Germany builds 42.5% and Italy builds 15%--the wings. Work on the propulsion system is broken up in the same proportions. Many a European airman argues that a more efficient way must be found, perhaps by merging several companies into a multinational giant to compete with U.S. makers.

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