Boeing's Initial Response to Airbus

In April 1996, Boeings' leadership, including CEO Phil Condit, faced a daunting challenge as external consultants revealed the competitive threat posed by Airbus, which had grown to capture nearly 30% of the market. Although initially dismissed as a coalition of European manufacturers, Airbus proved its capabilities by building aircraft more efficiently than Boeing, boasting production and tooling costs up to 15% lower. This stark reality prompted a heated debate among Boeing executives on how to counter the Airbus threat, particularly driven by Ron Woodard, the head of Boeing's commercial aircraft division, who advocated for an aggressive price war. Thus, Boeing transitioned from its traditional business model, positioning itself to lower prices significantly to maintain market dominance.