"Fairbus" or "Unfairbus"

Résumé du document

By the end of the 1960s, European aircraft manufacturers realized that continued competition among them could result in continued American dominance in the industry. While European airlines operated 25% of the global airliner fleet, the European aircraft manufacturers' global market share was limited to 10%. European firms and governments agreed that only a coordinated approach could bring about a product that could compete with American manufacturers. The goal of the Airbus project was thus to boost the European aerospace industry by creating a viable competitor to Boeing and McDonnell Douglas and to lessen the EU's dependence on US aircraft development. Among factors that make the aircraft industry important for governments of European countries one can list advanced technologies both in design and in manufacture, the relationship between civil and military work, and the value of international trade in aircraft. Firstly, launching a new aircraft requires a massive investment in R&D which represents the main barrier to entry to the market. Airbus, new entrant to the commercial aircraft market, thus needed high levels of government support to finance the development of new models.

Extraits

[...] However, if Airbus and the supporting governments were to take this step, then Boeing would have to match their efforts and refuse state aid as well. In light of Boeing's dominance, it is understandable why the EU and Airbus are so ill-tempered regarding US state aid to the aircraft industry. In this game theory situation, the best outcome could only result from the cooperation of the two parties on the reduction of subsidies. Both would be worse of with the continuation of the current case pending before the WTO and the surrounding trade war. [...]

[...] It was a consortium, an association of corporations, in which each member pooled capital and received profits relative to the proportion of capital provided. A GIE was not required to pay taxes on profits. Although it was not required to make its books public, all members of the Airbus Industrie GIE did publish their accounts. This first Airbus aircraft, the A300, was initially comprised of parts produced by French manufacturer Aérospatiale, German manufacturer Deutsche Aerospace and British manufacturer Hawker-Siddeley; the only production role for Airbus Industrie was final assembly at its plant in Toulouse. [...]

[...] But the question is, what can be considered as ‘fair' competition? First, an overview will be given of both sides' standpoint, after which a conclusion will be rendered based on those arguments and on competition regulations in vigor. Table Grievances of both parties (Heymann 2007, p.7) Looking at Airbus' history, which started out as and remains to this day albeit to a lesser extent- a political project, direct state intervention in the development and production of new civil aircraft has been the order of the day since its inception. [...]

[...] As a result, for 500 finished airplanes there are development costs for each airplane at a value of 6 billion US$ compared to 1000 airplanes, where only half of the sum is needed.[3] Airbus expects to sell a total of 750 aircraft, and estimated break-even at 420 units, increased from 270 due to the delays and the falling exchange rate of the US dollar. According to the latest news (“Frankfurter Allgemeine” 04.05 .2007), the break-even point has risen, due to the difficulties that this project is facing. Source: http://numerabile.it/wp-content/airbus_orders_graphic.gif 2. Opportunities At this time, Boeing was the only constructor present on the sector of large carriers. The creation of the A380 plane was an occasion for Airbus to be leader on this niche. [...]

[...] Moreover, the Airbus management team, was allowed this freedom, as it operates independently from the participating governments. Furthermore, the strengthening and stimulation of future vital sectors will aid in the general improvement of competition in those sectors, which will be eventually beneficial not only to other companies, as their competitiveness vis-à-vis foreign competitors increases. But eventually also for the individual consumers as they benefit from lower prices, more advanced technology, etc. Another key point which European governments must retain is the level of intergovernmental and inter-company cooperation which has been achieved in Airbus Industrie. [...]