A Boeing Of Asia?

It could take decades for Japan or China to pose a serious threat, analysts say. Boeing and Airbus are flying high, with record sales in 2005, and complete domination of the market for planes that carry 150 or more people. Richard Aboulafia of the Virginia-based Teal Group says that Japan simply isn't investing the massive amounts of money--billions over decades--necessary to get a full range of passenger jets off the ground. "All-American defense spend-ing is what you need for this industry, not METI's $29 million annual investment--that's corporate welfare for engineers," says Aboulafia. Indeed, the manufacturers most directly in competition with the next generation of Chinese and Japanese passenger planes are the smaller ones, like Brazil's Embraer or Canada's Bombardier.

Of course, the whole idea of "national" aerospace giants may be doomed now that Boeing and Airbus are increasingly less American or European. "What's the point of doing it all yourself when you can do it better and more cheaply when you spread it around the world?" says one industry insider, who declined to be named because he works for a high-profile aerospace company. "In 20 years it will be impossible to distinguish what is an American, Asian or European aircraft." That's likely to be true, too, for a Boeing of Japan, or an Airbus of China, if they ever take off.

With Christian Caryl in Tokyo

© 2006