► Boeing
Chicago based corporation is only main competitor
Held the larger market share up to 2003
Since then Airbus has gained control of 54% of the
market
Well known for 727, 737, 747, 757, 777, etc.
Has been the recipient of many tax breaks and defense
contracts
The Planes
Airbus has focused on midsized commercial and cargo jets for the past
30yrs. However, in 2000 they took on a venture to construct the largest
commercial jet ever.
Boeing 787
• Scheduled to enter fleet by 2008
• 20% more efficient than typical mid-size jets
• Long-range of 16,000 km
Airbus A350
• Scheduled to enter fleet by 2010
• Rehashed A330
• 12% more efficient and Increased Range
• Newer Materials
• Being built on existing lines
• Asking for €1.3 billion in aid
Direct Subsidies
Direct Subsidy is government aid given to a
corporation for R&D on a non-governmental
project
► Airbus
Government aid was needed back in 1970
Two most recent projects have sparked the
most controversy
Received €3 billion for development of A380
Asking for €1.6 billion for development of A350
1992 Agreement
► Large Civil Aircraft Agreement(LCAA)
EU would accept agreement in return of US dropping
GATT subsidies case
► Allowed for an Airbus project to receive up to 1/3
subsidy
► “The [1992 agreement] which was intended, I
think, to help a start-up industry get going has
come to set the floor subsidy”
Boeing CEO, Harry Stonecipher (BBC News)
Complaints against
Airbus Boeing
► No longer an “Infant ► Received over $20 bn in
industry”, (read: market R&D grants from NASA
share) and US government
► Received over $15 bn in ► Washington state tax
illegal loans since 1967 breaks & improvement
► Generous repayment subsidies of $7.4 bn
terms ► Japanese 787 launch aid,
► Indirect aid from $1.6 bn
government subsidies to ► No repayment necessary
suppliers
Defenses
Airbus Boeing
► Subsidies are loans which ► Washington State tax
can be repaid reductions are available to
► “Needs government all commercial aerospace
investment support to companies (including
launch the A350 and Airbus)
ensure future generations ► US government contracts
of workers’ jobs and are available to all (BAE
prosperity” (Liverpool Daily Systems is just as active)
Post, May 4 2005)
Market Share