What does the falling dollar mean for aircraft manufacturers?

A few things.

It depends on whom you ask though.

For airplane builders, like Airbus, it means that their planes cost more than Boeing's, because Airbus deals in Euros but sells in dollars. So as their costs pile up from suppliers, workers wages and other expenses in Es, their profit margin goes down more and more because they sell in $.

For example (purely theoretical)

Labor: 50 E
Parts: 50 E
Other: 50 E
Total: 150 E

150 E = $219.90 (E 1 = $ 1.466)

But Boeing might have:

Labor: $ 60
Parts: $60
Other: $60
Total: $180

For the unmathed - that's $39.90 more for an Airbus aircraft even with cheaper base prices.

With a lower exchange rate, profit margins go down because they have to price down. Boeing could feasibly sell their airplane for $200 and still make a $20 profit. If Airbus sells at $210, they still lose $9.90. See why Boeing has an advantage?

So what can Airbus do?

For starters, they can start building airplanes paying US $ - and that's just what they're fixin' to do:

Airbus Seeks a Welcome in Alabama - New York Times

Yeehaww. I liked their lede:

"Louis Gallois, the co-chief executive of EADS, the parent company of Airbus, could have his pick of invitations among dozens of parties during the Paris air show, the giant industry gathering this week.

But on Saturday night, Mr. Gallois went to pay his respects at a gathering held by members of the Mobile City Council of Alabama and the Mobile Airport Authority."

Only a $9 trillion debt, vanishing currency value, towering oil prices and a huge military contract for refueling tankers could cause the CEO of EADS to hobnob with the who's who of the Mobile, Ala. jetset. But he sure is doing it.

You see, EADS is pinning it's hopes of overcoming the American Congress' silly "Buy-American" tendencies on the folks of Mobile, who hope to attract an Airbus plant in the near future. Operating in the United States would give Airbus the ability to buy American parts at literally bottom-dollar American prices, and pay non-union American workers respectable union wages and give them lots of benefits for far cheaper than they would be paying in a similar factory in France or Germany.

Also, an American plant would give Airbus the credibility it needs to get that big fat American government contract to build it's European airplanes in the United States for the American military to operate.

Got me?

With the dollar being so low - this contract becomes even more important for EADS. We'll see what happens - but it really is unlikely that they'll get a contract. It might have the backing of Mobile, along with Alabama's senators and reps - but Alabama doesn't exactly have the Congressional clout it needs to bring other members (and it would need lots) on board to make an Airbus bid successful over an American product.

But that's no knock to the state of Alabama. They do have that awesome song...