Cliff Hangar

(Of course, Airbus' majority stakeholders, EADS and BAE Systems, both have significant military businesses, too.) The Europeans thus don't see subsidies going to zero. Says Forgeard: "We want a level playing field with a level of support that is acceptable to both sides."

The debate over subsidies is especially heated because the aircraft business is so precarious. Launch costs for a new aircraft can be enormous, with little guarantee that the market will reward innovation. In December 2003, Boeing announced it would build the twin- engine, highly efficient 7E7 — its first new airplane in a decade and its designated aircraft of the future. In contrast to the A380, which is designed to fly lots of people to big hub airports, the smaller (around 220 passengers) 7E7 aims to fly longer distances and to more cities. The company estimates its launch costs at a massive $9 billion.

But while Boeing predicted it would have 200 orders for the $120 million 7E7 by the end of last year, only a few airlines have actually ordered one, including an obscure Italian carrier called Blue Panorama and Britain's First Choice Airlines. Explains a Boeing spokesman: "It is simply a matter of time before we get there." The company notes that Boeing's commercial airplane unit is still profitable.

Airbus places heavy bets, too. Late last year the company announced it would launch a new plane — the A350, similar to the 7E7. Boeing's argument is that Airbus can make such snap choices because it never faces the kind of market risks that Boeing does. Richard Aboulafia, an aerospace analyst at Virginia-based Teal Group, agrees: "Airbus has the freedom to develop new products whenever it wants, or to discount prices whenever it wants, because its shareholders won't abandon it. Boeing, a fully floated company, has no such luxury."

Boeing is trying to spin the A350 as a sign of lost confidence in the A380. Sniffs Stonecipher: "The A380 is a great engineering success — but so was the Concorde. The A380 could be a market disaster." John Leahy, Airbus' American-born top salesman, dismisses that prospect, saying airlines want both options — the A380 and the A350.

No matter who's right, Boeing can't afford to make the wrong call. Ulrich Horstmann, an aerospace analyst for Bayerische Landesbank in Munich, says: "If Boeing doesn't make the 7E7 a success, it has no more trumps in its hand." Don't think Stonecipher isn't aware of that. He has overseen a revamping of Boeing's commercial airplane unit and recently approved the firing of the head of the firm's sales team. He admits that Boeing has been arrogant in the past, but says he sees that dangerous overconfidence among the Airbus troops. "I've been listening to the Airbus guys ... Sounds a lot like Boeing a few years ago. Arrogance is just awful. It will kill you," says Stonecipher. So he is hopeful, if not happy. And yes, he has some travel plans in the very near future.