New Airbus chief executive Noel Forgeard took firm control of the consortium's future here yesterday-kicking off marketing for the 100-seat A318 and raising aircraft prices 3% across the board.

The Airbus board of directors is scheduled to vote on launching the A318, formerly the A319M5, in December, Forgeard said. His sales staff has meanwhile been given "authorization to offer" by the Airbus board a number of aircraft in a traditional pre-launch phase. An undisclosed number of orders usually is required by a manufacturer's board to launch a new derivative. However, Airbus also feels the need "to protect" its slightly larger A319, Forgeard said.

In a major boost for Pratt & Whitney's sagging fortunes, the A318 will be powered by PW6000 engines. Pratt was in hot competition with CFM International's CFM56 for the order.

In raising prices, Forgeard signaled a truce in the price war with Boeing. Indeed, a main part of his "commercial strategy" at Airbus is to bolster shareholder value, Forgeard said. Boeing, too, recently raised most of its prices by 5% to help its commercial aircraft operations reach a goal of double-digit profitability.

Forgeard, who took over as top man at Airbus after the charismatic, wise-cracking Jean Pierson retired in the spring, displayed a humorous, lower-key but determined attitude at yesterday's press briefing here. Farnborough '98 is his first major international airshow as Airbus chief. His performance at the head of the high-visibility company, which had a turnover of $6 billion in the first half of the year and logged over $20 billion in orders over the same period, is being closely watched by suppliers and competitors.

Forgeard begins his tenure as the head of Airbus with a strong portfolio. The European consortium lists a burgeoning order backlog worth over $75 billion. This equates to four years of work at current production rates. Indeed, in the two years since the last Farnborough show, the company has garnered in excess of 800 orders, more than the company achieved during the first 18 years of its existence, Forgeard said.

Airbus also is nearing its goal of achieving 50% market share. Thus far in the year it has won orders for a total of 330 aircraft, giving it about 52% of sales. These have included several key sales, including an order for up to 188 A320-family narrowbodies by British Airways worth $8.5 billion, if all options are realized. United Airlines also has ponied up for 52 more A320-family transports since January 1.

In perhaps the most important choice of his career, Forgeard will preside over the decision to launch the 555-seat Airbus A3XX. Company officials have said that the all-new, double-decked design is necessary to break Boeing's monopoly on the 400+ seat market. Forgeard said Airbus is conducting "exhaustive" market studies of the huge new transport, which in growth versions could reach 1,000 seats. This includes working with 20 top airline executives to optimize the basic A3XX configuration. He said here that any launch decision would be "the most important investment ever" for Airbus. The company estimates development costs at $10 billion, though other sources have placed them significantly higher.

Airbus has already opened negotiations with European and U.S. aviation authorities on the certification basis for the A3XX, Forgeard said. The company forecasts a market for 1,300 new transports greater than 400 seats, worth more than $300 billion, over the next 20 years.

Forgeard also promised a "leaner," more streamlined Airbus as the four partner companies transition to single corporate status over the next two years. This will help the organization increase efficiency as well as successfully weather expected industry downturns. The ongoing Asian crisis has resulted in 12 narrowbody and zero widebody cancellations for Airbus. Delivery of another 15 transports with handover dates in 1999 and 2000 have been delayed, Forgeard said. He said that the Asian crisis, which most expect to hurt a major A3XX market, would not significantly Airbus launch plans since such an aircraft will be around for 30 years.

By Paul Proctor