Airbus must compete now on a level playing field
April 03, 2011
One must wonder why The European Commission would welcome last week’s World Trade Organization’s final case ruling on subsidies, as it clearly favors Boeing over Airbus. Still, a proud face was put up by the EU members, who maintain that Boeing has received subsidies in the past and continues to receive them today.
All too true, Boeing admits, but the scale of those federal and state gifts for NASA-related programs pales in comparison. Airbus received more than $20 billion in impermissible funding versus $2.7 billion for Boeing.
As I reported in Supply Chain Management Review, Boeing executives said that measuring this decision with that of last June reveals a market distorted by Airbus’ practices, with illegal launch aid being the “key discriminator.”
Added Boeing: “The WTO ruling on launch aid goes to the heart of the Airbus business model, which now must change. In contrast, there are no comparable findings or consequences to the U.S. or Boeing from today’s decision, as the WTO has now fully and finally rejected most of the EU’s claims.”
The EU’s countersuit victory is pyrrhic at best, as it means Airbus will now have to scramble in an effort to recover market share without massive government aid.
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