John Leahy, the longtime sales chief of Airbus, was gliding through Los Angeles in a limousine, on the way to a morning sales call, when...

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John Leahy, the longtime sales chief of Airbus, was gliding through Los Angeles in a limousine, on the way to a morning sales call, when his cellphone rang with an urgent call from Manila.

Leahy flipped open his phone and said a curt hello. Then he nodded as one of his lieutenants passed along some key intelligence.

The Airbus sales team in Asia had gleaned from its web of contacts that Yang Ho Cho, the chairman of Korean Air, had scheduled a lunch that day in Los Angeles with Leahy’s archrival, Alan Mulally, the chief executive of Boeing Commercial Airplanes.

Cho’s organization was deep in the throes of making a multibillion-dollar decision to purchase either Boeing’s new 787 Dreamliner or the Airbus A350. And Leahy wanted to seize the opportunity to outmaneuver Boeing.

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“Do you know what time he’s meeting Mulally?’ Leahy asked.

In the $50 billion business of selling passenger jets, outflanking your rival often can spell the difference between winning or losing orders big enough to swing the balance of global trade. Few have done that better than Airbus’ indefatigable, silver-tongued salesman.

On this particular day, however, Leahy learned that Boeing had the upper hand. When he sat down with Cho over tea in the coffee shop of the Wilshire Grand Hotel, Cho told him that his technical team was leaning toward Boeing. The problem: Airbus engineers had failed to spend as much time as the Boeing team explaining why theirs was a better airplane.

“I guess we screwed up,” Leahy concluded.

What Leahy is discovering is that in the high-stakes game of selling airplanes, it may be easier to be the pursuer than the pursued. When it swept past Boeing to become the world’s largest jetmaker two years ago, Airbus roused the long-slumbering giant. And now the chase is on.

Last Monday, five weeks after Leahy met with Cho, Korean Air announced it had ordered 10 Boeing 787s, while taking options on 10 more, partly because Boeing agreed to buy parts for the plane from the Koreans, sources say.

[Korean Air has its own aerospace division, which does heavy maintenance on airliners and also builds aircraft parts for both the U.S. Air Force and for Boeing.

Internal Boeing documents obtained by The Seattle Times last year indicate that Korean Air is scheduled to make the wing tips of the 787, though no official announcement on that contract has yet been made.]

Northwest deal possible

Northwest Airlines is also within days of buying 787s to update its aging fleet. Boeing and Northwest won’t comment, but sources say a key part of the deal may be upfront financing from Boeing.

The two orders give Boeing’s new program a major leg up in a battle that it had been losing for the past several years.

“Objectively, they’ve got the high ground right now,” Leahy said on Tuesday. “I wanted Korean and Northwest.”

Since 1994, the 54-year-old New York native has tormented his American archrival by leading a sales assault that resulted in one of the most remarkable market flip-flops in modern business history.

But Boeing is fighting back hard with lower costs, an impressive new airplane and an all-out strategy focused on preventing Airbus from launching its own new product to compete.

If Boeing can win enough orders from airlines like Korean and Northwest, it might be able to kill the A350, which has yet to win launch authority from the Airbus board.

“They seem to be doing everything they can to stop the A350 from being an industrial launch,” Leahy said. “My job is to make sure that doesn’t happen.”

Airbus, he promised, will have 100 orders for the A350 in hand by the end of the year.

Ironically, Boeing may have Leahy to thank for many of the changes that allowed it back into the game. Watching Airbus soar from 18 percent of the market to 57 percent over the past decade has shaken Boeing from its bureaucratic torpor.

After getting feedback from miffed customers last year that Leahy’s sales team was much more responsive, Boeing has gone to school on its European rival. It has sped up decision-making, while dispatching senior executives and board members into the field to drum up sales. It has made winning back market share a priority and is enabling its salesmen to take more risks in pricing.

Changes at Boeing

In addition, it has revamped its production lines to make them more competitive with Airbus’ and it finally has rolled out a compelling new product in the 787, the first commercial airplane with a fuselage and wings built almost entirely from carbon-fiber composites.

It also has prodded the United States to launch a trade war intended to stop European government subsidies that could make an A350 launch easier.

“We’ll be on top in terms of orders earned in 2005,” vowed Scott Carson, who took over as Boeing’s chief of commercial sales in a management shake-up in November.

Even Leahy is impressed.

“When they say stuff like that, and they start to getting very aggressive on pricing,” he said, “all of a sudden you get to a situation where these guys could really turn it around this year.”

Leahy, of course, is hardly the only reason for the Europeans’ success. Most industry observers agree that Airbus has benefited mightily from billions of dollars in government subsidies.

But in recent months, Boeing executives also have come to realize that subsidies are not the sole source of the U.S. company’s swoon.

Customers say “we’ve been arrogant and slow,” said Boeing Chairman Lewis Platt. “We weren’t aggressive, we weren’t visiting customers. We kind of just blew them off.”

Mulally said Boeing has been distracted in recent years by the need to revamp its production lines to make them as efficient as the ones Airbus has in Europe. It also has been busy developing the 787, which will require an entirely new business model and production system.

Now, however, the resulting efficiencies are giving the U.S. company the ability to price its airplanes more aggressively, and Mulally has instructed his team to turn up the heat on Airbus.

Keeping tabs on Leahy

Until recently, the Monday morning sales meeting at Boeing’s commercial-airplane division in Renton always included a question: Where’s Leahy?

“I asked where he was every week, and I expected them to know,” said Carson’s predecessor, Toby Bright, who lost his job after forfeiting too many deals to Airbus last year.

“Wherever Leahy was,” Bright said, “was where the deals were coming down.”

The problem for Boeing has been that Leahy and his team are everywhere. The Airbus chief has created a sales organization that performs more like the extension of a scrappy Silicon Valley startup than the front end of an enterprise founded by four plodding European governments.

In the big-ticket business of selling airplanes, the countless hours spent schmoozing with people at all levels of an airline allow a sales organization to ferret out what’s really important to the key decision-makers.

Over a 10-day period last month, Leahy flew back and forth to the United States twice to tend to three different sales campaigns — Korean Air, Northwest and International Lease Finance, a giant leasing company that is considering the 787 and the A350.

The Korean deal turned out to be a bust, but Leahy doesn’t consider it time wasted. By competing at all, Leahy forced Boeing to expend capital that it might not have for a future deal. However, Mulally’s new willingness to venture into the field with his salesmen has made Leahy’s job more difficult.

“Mulally has the ability to change things,” Leahy said. “He gets an hour and a half, maybe two hours with the chairman of Korean Air, and he can reach across the table and have a handshake with the guy. That’s damn near impossible for me to recover from.”

Dogged competitor

As the recent sales losses attest, Leahy and Airbus failed to guard their flank when they made their charge past Boeing.

When Airbus launched its A330 in the late 1990s, the new plane rendered Boeing’s 767 obsolete. The A330 took more than three-quarters of the midsize wide-body market and proved a major win for the Europeans.

But last year, when Boeing rolled out plans for its highly efficient 787, Airbus pooh-poohed the new plane.

“When you’ve got 80 percent of a given market, ” Leahy said, “you aren’t spending a lot of time thinking about how to improve that position.”

By fall, as Boeing began to generate real interest in its new plane, Airbus had to scramble to retrofit its A330 with new composite wings and high-thrust engines to create the A350. Now it has fallen behind in a key market, and Leahy is scrambling to get his board to spend $5.3 billion to build it, even as the company runs over budget on the $12 billion effort to get its giant A380 in the air this year.

Leahy insists he works better when he’s behind, and he’s convinced the lost sales will give Airbus a renewed sense of urgency. He’s battled Boeing before, and he’s confident he can do it again.

“The underdog always has an advantage.”

Tribune reporter David Greising contributed to this story. Information on Korean Air’s role in 787 production is from previous Seattle Times reporting.