Fairbus or Unfairbus? A case study of Airbus through five questions

Thèmes abordés

Airbus, Boeing, competition, case study, case study Airbus, case study Boeing, industrial policy, A380, Europe, plane, aeronautical industry, fair competition, concurrence, industrie aéronautique, étude de cas, étude de cas Airbus, étude de cas Boeing

Résumé du document

In this study we will try to briefly answer five questions relqted to Airbus by using concrete and recent examples and clear economic mechanisms. We will use the Airbus case to learn about the origins of the aeronautical industry in Europe, about fair or unfair competition with Boeing, about the launch of the A380 new project, and about the industrial policy of Europe.

Extraits

[...] Answer to Q2: The major reason why European countries can build a new industry like Airbus is the integration of European Union (European community). The Airbus building ways are as following: Based on the previous failed experience (Concorde), European countries used the different way to manage the company, single management team in order to have a better defined corporate objectives and exercise total management control. However shareholders are also subcontractors and they are stated owned companies from France, Germany, Great Britain and Spain. [...]

[...] However the fact that suppliers can only supply one producer as well as the fact that costumers may be “locked because the costs of changing manufacturers are too high, have a real impact on the market and may be considered as unfair trade. Question Now Airbus is a part of EADS, with a new project A380. What are the opportunities and difficulties with this new plane? Opportunities Niche market: large passenger jet for long distance flight The jet has 555 seats in a typical passenger layout, with a range of up to 15,000 kilometers. They can increase passenger flow through airports without increasing the number of aircrafts. This is likely to enhance efficiency of airports as well as minimise unit costs. [...]

[...] By way of a joint industrial policy in the field of aircraft manufacturing, the European union was able to create an undertaking which had its aim to break the monopoly of US manufacturers especially Boeing in the aircraft manufacturing. Thereby, the case exhibits one of the best examples of the effective implementation of the selective intervention industrial policy, wherein the state supported the growth of the emerging industry (aircraft industry in this case) to face global competition. The need for such intervention emerges in the case of imperfect competitive environment, especially the cases where there exist large entry barriers. [...]

[...] According to Airbus, the A380 has about a 13 percent lower fuel burn than the 747. The cost per passenger should be up to 20 percent less than on a 747, raising the possibility of cheaper tickets. - New services: Though it will have only 35 percent more seats than a 747, it will have 49 percent more usable passenger space. That leaves open possibilities like in-flight bars, lounges, shops and gyms. Thus, if the new A380 is going to succeed in its objectives, it may: Breake the monopoly of Boeing Airbus surpassed Boeing in 2004 in the number of planes delivered to airlines for the second consecutive year. [...]

[...] Question number Is it fair competition between Airbus and Boeing or unfair competition? During the eighties when Boeing started to fear Airbuses competition, it started to argue that the American company was suffering from unfair competition as Airbus was a heavily subsidized company. Airbus also accused Boeing of being supported by the American government indirectly. Let us analyze whether or not this is unfair competition between Airbus and Boeing. Airbus is accused of unfair competition because it receives government subsides. [...]