Stop casting blame on each other, sit down and talk - finally

When Airbus and Boeing gave their interpretation of the WTO ruling on European Airbus subsidies on June 30th, 2010 , it was hard to believe that they were talking about the same document. I bet you dollars to doughnuts, it won’t be any different, when we finally get the ruling on the United State’s financial support for Boeing. Lots of word, but no victory nowhere.

It’s about time, that the U.S. and the Europeans finally end this fruitless game and agree on a new set of rules with significantly lower subsidies – or even better no subsidies at all. Everything beyond basic research and the development of basic technologies should to be industry funded. 

Don’t tell me, that it’s impossible to launch a new airplane program like the A350XWB or the 787 without subsidies and generous tax breaks when you have orders worth five or six times times the expected development cost long before you start building the first airplane. Especially when you have a duopoly and a market so big that no one of the two competitors can serve it alone.

Subsidies reduces the economic risks of an aircraft program. Good for the shareholders, you might think. But state money tends to raise white elephants. Or does anybody believe the Airbus A340-500/-600 program would have been launched on purely economic terms? We won’t even have an A380. Both programs have been a huge cash drain and have undermined Airbus’s competitive position for years to come. The attempt to counter Boeing’s innovative 787 with a low effort A330 makeover has been proof of that fundamental weakness.

While Europe and the U.S are loosing years and years in exchanging accusations, others have started  pouring billions of tax money in their aerospace sectors. They are creating competitors, which are going be even heavier subsidised.

But who can demand playing to the rules who doesn’t stick to them himself?

Heinrich Grossbongardt 
h.grossbongardt@expairtise.com 
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