Boeing Giving Up On Airliners?
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A320 Driver... The LEADING Low cost airline is still SOUTHWEST. They fly a all Boeing 737 fleet... 
Airbus pushed hard to get their foot into the No frills market and made offers at times, which Boeing couldn't come up with (easyjet etc.)
From a pilots point of view, I hope, that there will be always more than only one manufacturer, because I believe competition leads to a better product. Personally I don't like the design philosophy of airbus, pushing the pilot more and more out of the loop. I know it is nowadays everything about business
, but I still want to have fun sometimes, while going to fly and not getting bored to death. An all airbus world... Hope it never happens!
Airbus pushed hard to get their foot into the No frills market and made offers at times, which Boeing couldn't come up with (easyjet etc.)
From a pilots point of view, I hope, that there will be always more than only one manufacturer, because I believe competition leads to a better product. Personally I don't like the design philosophy of airbus, pushing the pilot more and more out of the loop. I know it is nowadays everything about business
, but I still want to have fun sometimes, while going to fly and not getting bored to death. An all airbus world... Hope it never happens!
First of all, I'll probably end up on the A-320 one day, unless somebody gives us some 737s for almost free (which Boeing can not easily do, as the civilian sector can not, by law, receive US taxpayer revenue without a special Congressional exemption).
1) The first airline in either the US, or possibly all of North America, to order the A-320 (fbw) jets was an airline, whose CEO allegedly accepted some per$onal, eh, " gift ". According to the "Wall Street Journal", the former CEO was friends with a Bavarian politician (Strauss?) who was then on the Board of Directors at Airbus. This same CEO lost his golden parachute when the airline was sold to completely new owners.
2) I can not prove this, but was not JetBlue paying either about half the normal lease rate, or almost none at all, until a few months ago? How about the other low-cost operators with similar Airbus equipment? I'm sure that JetBlue was the only company to have been given such marketing advantages............
It must be quite nice to offer a family of aircraft, however well-designed and/or stuffed with microchips, when the taxpayers of various (high-tax) countries subsidize the development or production etc, but when an airline(s) operates for a grace period with reportedly very little in the way of lease payments, that is quite a deal, which is hard to compete with.
Isn't this very similar to what they referred to years ago as "dumping", concerning the steel industry? My comments do not presume to portray the basic industry(s) by way of a few random comments, but are these not fairly accurate assessments of some pieces of the overall picture?
1) The first airline in either the US, or possibly all of North America, to order the A-320 (fbw) jets was an airline, whose CEO allegedly accepted some per$onal, eh, " gift ". According to the "Wall Street Journal", the former CEO was friends with a Bavarian politician (Strauss?) who was then on the Board of Directors at Airbus. This same CEO lost his golden parachute when the airline was sold to completely new owners.
2) I can not prove this, but was not JetBlue paying either about half the normal lease rate, or almost none at all, until a few months ago? How about the other low-cost operators with similar Airbus equipment? I'm sure that JetBlue was the only company to have been given such marketing advantages............
It must be quite nice to offer a family of aircraft, however well-designed and/or stuffed with microchips, when the taxpayers of various (high-tax) countries subsidize the development or production etc, but when an airline(s) operates for a grace period with reportedly very little in the way of lease payments, that is quite a deal, which is hard to compete with.
Isn't this very similar to what they referred to years ago as "dumping", concerning the steel industry? My comments do not presume to portray the basic industry(s) by way of a few random comments, but are these not fairly accurate assessments of some pieces of the overall picture?
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Here we go again, Boeing vs Airbus.
Airbus is subsidised and has a poor pilot/machine interface, we hear from the B(oeing) crowd.
Fact: Airbus does not receive any handouts, only loans that has to be paid back. Allmost all people, who I talk to who have actually flown the Airbus love it, it's just different and takes a little getting used to.
Boeing is old and an out of date aircraft with no progress, we hear from the A(irbus) crowd.
Fact: Boeing is an evolving firm, slowly but surely improving its product line over a period of time. That Boeing has tried to improve on this, by coming up with a publicity stunt that backfired (the Sonic Cruiser) is their own fault. Boeing should have done what they are good at, evolve their product. Next maybe boeing should come up with a new product line, giving airlines and people a new product, that is economically viable for the airlines and giving the pax more space in the width (single isle).
Allmost all people I've talked to who fly's Boeing love them, only complaint is the noiselevel in the cockpit.
Airbus is subsidised and has a poor pilot/machine interface, we hear from the B(oeing) crowd.
Fact: Airbus does not receive any handouts, only loans that has to be paid back. Allmost all people, who I talk to who have actually flown the Airbus love it, it's just different and takes a little getting used to.
Boeing is old and an out of date aircraft with no progress, we hear from the A(irbus) crowd.
Fact: Boeing is an evolving firm, slowly but surely improving its product line over a period of time. That Boeing has tried to improve on this, by coming up with a publicity stunt that backfired (the Sonic Cruiser) is their own fault. Boeing should have done what they are good at, evolve their product. Next maybe boeing should come up with a new product line, giving airlines and people a new product, that is economically viable for the airlines and giving the pax more space in the width (single isle).
Allmost all people I've talked to who fly's Boeing love them, only complaint is the noiselevel in the cockpit.
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To be fair...
Condit Defends Performance...
Despite a gloomy order book and a still-gloomy forecast, Boeing CEO Phil Condit recently assured shareholders the company is on the right track. It's no secret that rival Airbus is edging out Boeing in the commercial aircraft manufacturing sector. Many predications call for Airbus to beat our Boeing in sales this year. However, Condit told a shareholders' meeting that Boeing is still strong due to its diversification into the defense and space sectors. Condit said current data still show Boeing is on track to deliver 280 airliners after shipping 71 in the first quarter. The wars in Iraq and Afghanistan have been good for business and no one else seems to match Boeing's posture in the military market. Airbus is struggling in this sector and recently lost some orders for its long-awaited A400M. Last year, Germany cut its orders to 60 from 72 and Portugal canceled its three orders of the $80 million aircraft, which has been under development for 20 years. Meanwhile, Boeing is on the attack in Airbus's home turf and is talking to France, Sweden, Norway, Germany, and NATO about orders of C-17s or 767 refueling tankers, said Chris Raymond, Boeing's manager of business development for those programs.
...As 1Q Losses Nearly Largest In History
Condit's note of confidence belies the company's financial performance. Boeing last week reported a fourth straight drop in quarterly revenue, and sales in Europe have plunged 35 percent in two years amid a slump in commercial air travel. To cope with the decline in demand from commercial airlines since 9/11, Boeing has eliminated 30,000 jobs and halved jet production. Boeing shares have plunged 37 percent since the Sept. 11, 2001, terrorist attacks that sent the aviation sector into an unprecedented downturn. To add insult to injury, J.P. Morgan Securities downgraded Boeing to underweight, noting that the Commercial Airplanes unit was highly dependent on Asian carriers for deliveries, noting that they are increasingly affected by SARS. At the shareholders' meeting, Condit downplayed the significance of SARS on the company's future prospects since the disease is still contained in a few cities. "Obviously if this becomes a global epidemic, it's a big deal," he said. "Clearly right now, it is the classic reaction to the unknown that is sidelining travelers."
Condit Defends Performance...
Despite a gloomy order book and a still-gloomy forecast, Boeing CEO Phil Condit recently assured shareholders the company is on the right track. It's no secret that rival Airbus is edging out Boeing in the commercial aircraft manufacturing sector. Many predications call for Airbus to beat our Boeing in sales this year. However, Condit told a shareholders' meeting that Boeing is still strong due to its diversification into the defense and space sectors. Condit said current data still show Boeing is on track to deliver 280 airliners after shipping 71 in the first quarter. The wars in Iraq and Afghanistan have been good for business and no one else seems to match Boeing's posture in the military market. Airbus is struggling in this sector and recently lost some orders for its long-awaited A400M. Last year, Germany cut its orders to 60 from 72 and Portugal canceled its three orders of the $80 million aircraft, which has been under development for 20 years. Meanwhile, Boeing is on the attack in Airbus's home turf and is talking to France, Sweden, Norway, Germany, and NATO about orders of C-17s or 767 refueling tankers, said Chris Raymond, Boeing's manager of business development for those programs.
...As 1Q Losses Nearly Largest In History
Condit's note of confidence belies the company's financial performance. Boeing last week reported a fourth straight drop in quarterly revenue, and sales in Europe have plunged 35 percent in two years amid a slump in commercial air travel. To cope with the decline in demand from commercial airlines since 9/11, Boeing has eliminated 30,000 jobs and halved jet production. Boeing shares have plunged 37 percent since the Sept. 11, 2001, terrorist attacks that sent the aviation sector into an unprecedented downturn. To add insult to injury, J.P. Morgan Securities downgraded Boeing to underweight, noting that the Commercial Airplanes unit was highly dependent on Asian carriers for deliveries, noting that they are increasingly affected by SARS. At the shareholders' meeting, Condit downplayed the significance of SARS on the company's future prospects since the disease is still contained in a few cities. "Obviously if this becomes a global epidemic, it's a big deal," he said. "Clearly right now, it is the classic reaction to the unknown that is sidelining travelers."
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Hi 320DRIVER,
Airbus lost money for 30 years so what are you trying to infer in bringing up Boeing's loss for a 1/4th of a year ?
So far, EADS & BAE's performance is even worse than Boeing as well !
As far as the EZ deal, EZ publicly claimed early last year that the 737NG is the most efficient airliner for a LCC, while asking Boeing for a better deal.
They didn't get it & went Airbus, does that make the A32X the airliner of choice for LCC ? No, but the higher A32x operating costs can be outbalanced by a very good price on lease rates, spares, maintenance etc...
Airbus lost money for 30 years so what are you trying to infer in bringing up Boeing's loss for a 1/4th of a year ?
So far, EADS & BAE's performance is even worse than Boeing as well !
As far as the EZ deal, EZ publicly claimed early last year that the 737NG is the most efficient airliner for a LCC, while asking Boeing for a better deal.
They didn't get it & went Airbus, does that make the A32X the airliner of choice for LCC ? No, but the higher A32x operating costs can be outbalanced by a very good price on lease rates, spares, maintenance etc...
Union Goon
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TCAS,
FACT, Airbus is GIVEN the money for product developement and then repays them via a "license fee" on each aircraft. They don't actually have to repay the loans if they don't sell any aircraft.
Boeing would KILL for a deal like that, because then they don't have to make the economic case for an aircraft they can just build them and hope that someone comes along to buy them, and if they do great, and if they don't no big deal. (Which is EXACTLY what Airbus does)
In the case of the A320 the loans were actually paid back (sort of) but not in any other airbus aircraft.
When it comes to developing aircraft they are breath takingly expensive.
If it costs 10 billion dollars to develope an aircraft and you borrow that money at zero percent interest (something Boeing can't do) and you sell 500 aircraft, 20 million dollars of each and every aircraft is developement costs that are there before you cut the first peice of metal (and build the factory, hire the workers etc).
Now all of that is before INTEREST expenses. that 10 billion dollars is spent years before the first aircraft is delivered. Sorry dude, you got it wrong, and just imagine the uproar from Europe if Boeing got a similar sweet deal.
The market would be flooded with dozens of relatively poorly selling "Common" derivatives like the A340 500/600. In reality the only thing common between the a340 300 and the a340 600 is the cockpit and the fuselage diameter.
Had Airbus come up with the idea of the Sonic Cruiser they most certainly would have built it, because it wouldn't matter if they sold any or not, they could just claim the "technological high ground".
Cheers
Wino
FACT, Airbus is GIVEN the money for product developement and then repays them via a "license fee" on each aircraft. They don't actually have to repay the loans if they don't sell any aircraft.
Boeing would KILL for a deal like that, because then they don't have to make the economic case for an aircraft they can just build them and hope that someone comes along to buy them, and if they do great, and if they don't no big deal. (Which is EXACTLY what Airbus does)
In the case of the A320 the loans were actually paid back (sort of) but not in any other airbus aircraft.
When it comes to developing aircraft they are breath takingly expensive.
If it costs 10 billion dollars to develope an aircraft and you borrow that money at zero percent interest (something Boeing can't do) and you sell 500 aircraft, 20 million dollars of each and every aircraft is developement costs that are there before you cut the first peice of metal (and build the factory, hire the workers etc).
Now all of that is before INTEREST expenses. that 10 billion dollars is spent years before the first aircraft is delivered. Sorry dude, you got it wrong, and just imagine the uproar from Europe if Boeing got a similar sweet deal.
The market would be flooded with dozens of relatively poorly selling "Common" derivatives like the A340 500/600. In reality the only thing common between the a340 300 and the a340 600 is the cockpit and the fuselage diameter.
Had Airbus come up with the idea of the Sonic Cruiser they most certainly would have built it, because it wouldn't matter if they sold any or not, they could just claim the "technological high ground".
Cheers
Wino
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Hi Wino,
I don't think the Americans can give Europeans any lessons on unfair Government support to businesses. Case in point is the US airlines cash-outs after Sept. 11.
Of course the US airlines were hit hard but weren't we all? And don't worry, Boeing (Military) will have plenty of business as long as Mr Bush is around. ;-)
I don't think the Americans can give Europeans any lessons on unfair Government support to businesses. Case in point is the US airlines cash-outs after Sept. 11.
Of course the US airlines were hit hard but weren't we all? And don't worry, Boeing (Military) will have plenty of business as long as Mr Bush is around. ;-)
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Wino
what about that USAF tanker dealer that allegedly would have been cheaper to buy all the tankers than lease them?
And apart from the pylons etc., what else changed in the 345-6? Surely tailfin etc. is the same?
what about that USAF tanker dealer that allegedly would have been cheaper to buy all the tankers than lease them?
And apart from the pylons etc., what else changed in the 345-6? Surely tailfin etc. is the same?
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345/6
Tail fin is Smaller cause it has a longer arm
Wing is different.
Fuselage skins are completely different (much thicker to support greater weight)
Engines are different
You get a better idea of the effect of length on the tail fin when you look at the tail of the 747sp which was larger and the rudder was segmented because of the shorter arm.
The European governments provided the funding. That has never been disputed and is still the case in the A380 though not at 100 percent now, but its still there at around 60 percent I think it was. Infact the British government was forced to pony up the cash or they weren't going to get any part of the manufacturing.
MarkD
As far as those tankers go, NOTHING HAS BEEN PURCHASED YET. And when they do, its keeping an old line open. How is that helping Boeing to compete? What new product arises?
Buying an aircraft that is long in the tooth is NOT the same as developing a whole new aircraft. And as the military business is bid on among many defense contractors it is not lucrative like a cash grant from the French government. Those contracts go to raw materials, salaries and research that does not really translate well. Military requirements are quite different then civilian ones which is why their are no Civilian C-17s flying though boeing would desperately like to sell them. So that arguement doesn't hold at all.
320,
The cash grant after 9/11 was for the days that the airlines were grounded by government order. They were forbidden from doing business through no fault of their own by federal order and were rightly compensated for their losses during that period. The Loan guarantee program on the other hand was a different animal set up to correct a perceved lack access to the equity market. It never panned out and when all is said and done only about 1 billion out of the 10 billion was actually loaned to any airlines. the bulk of which went to USair. And by the way, they weren't government loans, but Government loan guarantees. not quite the same.
Furthermore, it was never done before in the USA, and I would stop squawking and Airfrance, BA, Olympic, Sabena, etc have all received government money. I would say that was simply leveling the playing field.
Cheers
Wino
Tail fin is Smaller cause it has a longer arm
Wing is different.
Fuselage skins are completely different (much thicker to support greater weight)
Engines are different
You get a better idea of the effect of length on the tail fin when you look at the tail of the 747sp which was larger and the rudder was segmented because of the shorter arm.
The European governments provided the funding. That has never been disputed and is still the case in the A380 though not at 100 percent now, but its still there at around 60 percent I think it was. Infact the British government was forced to pony up the cash or they weren't going to get any part of the manufacturing.
MarkD
As far as those tankers go, NOTHING HAS BEEN PURCHASED YET. And when they do, its keeping an old line open. How is that helping Boeing to compete? What new product arises?
Buying an aircraft that is long in the tooth is NOT the same as developing a whole new aircraft. And as the military business is bid on among many defense contractors it is not lucrative like a cash grant from the French government. Those contracts go to raw materials, salaries and research that does not really translate well. Military requirements are quite different then civilian ones which is why their are no Civilian C-17s flying though boeing would desperately like to sell them. So that arguement doesn't hold at all.
320,
The cash grant after 9/11 was for the days that the airlines were grounded by government order. They were forbidden from doing business through no fault of their own by federal order and were rightly compensated for their losses during that period. The Loan guarantee program on the other hand was a different animal set up to correct a perceved lack access to the equity market. It never panned out and when all is said and done only about 1 billion out of the 10 billion was actually loaned to any airlines. the bulk of which went to USair. And by the way, they weren't government loans, but Government loan guarantees. not quite the same.
Furthermore, it was never done before in the USA, and I would stop squawking and Airfrance, BA, Olympic, Sabena, etc have all received government money. I would say that was simply leveling the playing field.
Cheers
Wino
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Sorry, but this works both ways.
On 24 February 2000, the WTO ruled US FSC exemptions amount to a prohibited export subsidy under the ASCM. The WTO gave the US until 1 October 2000 to comply with the ruling.
Boeing was named as one of the major beneficieries of this programme. For example, in its 2001 financial statements Boeing declared that FSC tax benefits amounted to US$222 million. This is 8% of Boeing's net earnings (US$2.8 billion).
Between 1995 and 2001, FSC benefits for Boeing amounted to at least US$1 billion. In terms of market value, it has been estimated that improved earnings due to FSC subsidies translate into advantages of US$1 to 2 billion for Boeing's market capitalisation, allowing it recourse to relatively cheaper capital.
Note that even after the WTO ruling this saga rumbled on. On 30 August 2002, the WTO arbitrators awarded the full amount (US$4,043 billion) of potential countermeasures that could be applied if the US does not repeal the ETI scheme.
In Feb 2003 even the Bush administration called for Congress to deal with these subsidies.
See:
http://usembassy.state.gov/tokyo/wwwh20030205a8.html
Incidentally, Airbus government loans are prescribed in a WTO agreement of 1992 (at least according Airbus), although questions are being raised by the US at the moment about whether A380 funding meets this ruling (jury is still out).
Dr Dave
On 24 February 2000, the WTO ruled US FSC exemptions amount to a prohibited export subsidy under the ASCM. The WTO gave the US until 1 October 2000 to comply with the ruling.
Boeing was named as one of the major beneficieries of this programme. For example, in its 2001 financial statements Boeing declared that FSC tax benefits amounted to US$222 million. This is 8% of Boeing's net earnings (US$2.8 billion).
Between 1995 and 2001, FSC benefits for Boeing amounted to at least US$1 billion. In terms of market value, it has been estimated that improved earnings due to FSC subsidies translate into advantages of US$1 to 2 billion for Boeing's market capitalisation, allowing it recourse to relatively cheaper capital.
Note that even after the WTO ruling this saga rumbled on. On 30 August 2002, the WTO arbitrators awarded the full amount (US$4,043 billion) of potential countermeasures that could be applied if the US does not repeal the ETI scheme.
In Feb 2003 even the Bush administration called for Congress to deal with these subsidies.
See:
http://usembassy.state.gov/tokyo/wwwh20030205a8.html
Incidentally, Airbus government loans are prescribed in a WTO agreement of 1992 (at least according Airbus), although questions are being raised by the US at the moment about whether A380 funding meets this ruling (jury is still out).
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WINO
Sorry to come back on this, but you used the word FACT which implies that and nothing else, can you give me the details of the money which the UK Government has allegedly given in relation to the A380? My understanding is that HMG provided no such aid, but then you may know differently?
Sorry to come back on this, but you used the word FACT which implies that and nothing else, can you give me the details of the money which the UK Government has allegedly given in relation to the A380? My understanding is that HMG provided no such aid, but then you may know differently?
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My understanding is that the UK government agreed in March 2000 to provide a £520 million loan for A380 development.
In addition, in October 2001 the European Commission agreed a £250 million development loan to Rolls Royce for development of the Trent 900, which will be fitted to the A380.
Previous loans are (I think):
March 1984: £250 million for the A320
March 1987: £450 million for the A330/A340
February 1998: £123 million for the A340-500/600
Note that repayments include royalties, so that for example the UK government continues to receive royalty payments for the A320 even though capital and interest have been repaid.
Dr Dave
In addition, in October 2001 the European Commission agreed a £250 million development loan to Rolls Royce for development of the Trent 900, which will be fitted to the A380.
Previous loans are (I think):
March 1984: £250 million for the A320
March 1987: £450 million for the A330/A340
February 1998: £123 million for the A340-500/600
Note that repayments include royalties, so that for example the UK government continues to receive royalty payments for the A320 even though capital and interest have been repaid.
Dr Dave
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OK here's what the UK's Department of Trade and Industry
http://www.dti.gov.uk/aerospace/launch-investment.htm
says about the A380 "launch investment" - ie it's not "given" to them without any return as is implied in Wino's posts. Also some interesting UK govt views on other countries' "aid" programmes.
LAUNCH INVESTMENT
Launch Investment is a risk-sharing Government investment in the design and development of specific civil aerospace projects in the UK. It has been used to support developments of airframes (or parts of airframes, such as wings), helicopters and aero engines. The investment is not a grant and is repayable to the Government at a real rate of return, usually via levies on sales of the product developed. By this means, the Government shares in the risk of the project, since the company may not achieve sales at the level or price forecast. Launch investment is available only to the aerospace sector and stems from the provisions of the Civil Aviation Act 1982.
Significant projects supported in the past include the Airbus A320 and A330/340 programmes. The A320 investment has already been repaid to the Government, and continues to provide a return. The A330/340 is contributing a steady stream of funds to the Exchequer, and is expected to pay for itself in the medium term. In November 1997, the Government reached agreement with Rolls-Royce to invest in new engines in the Trent family. This included the Trent 500 for the new Airbus A340-500/600 project, and also upgraded Trent 800 engines for the Boeing 777 family.
On 13 March 2000 the Government announced a new launch investment partnership with BAE SYSTEMS (Airbus UK) to support their participation in the Airbus A3XX ‘super-jumbo’ (subsequently launched as the A380). BAE SYSTEMS is now a 20% shareholder in the Airbus Integrated Company (AIC) with the European Aeronautic, Defence and Space Company (EADS), holding the remaining 80%. Airbus UK, the Centre of Excellence for wing design and manufacture, became a subsidiary company to the AIC and will receive the Launch Investment. This is the largest launch investment announced to date. More recently, the Government has also announced that it has joined with Rolls-Royce in an investment to develop the Trent 900 for the A380 and also the Trent 600 for future Boeing projects.
Launch investment enables the company and the Government to share the typically very high level of risk in aerospace projects, characterised by high costs, long payback periods, and a dearth of private sector investors. Launch Investment also recognises that modern aerospace projects are highly internationally mobile, and it enables the Government to capture valuable projects for the UK that might otherwise be carried out abroad.
The provision of launch investment is entirely discretionary. There is no formal scheme, promotion or budget for launch investment. Each launch investment application is considered on its merits against a range of established criteria and also, by the Treasury, against public expenditure constraints.
An applicant must demonstrate: that the project is technically and commercially viable; that Government investment is essential for the project to proceed on the scale and in the time-scale specified in the application; and that Government will recoup the investment at a real rate of return.
The Government undertakes a detailed assessment of the company’s business case and its claim that the project cannot be funded by alternative means. In addition, the Government assesses the technical viability of the project and the market for the product. Finally, an assessment is made of the wider benefits of the project to the economy beyond the company itself. These can include the spin-off of new technologies or production methods with wider applications in other sectors, or transferable improvements to the skill base. If it is decided to support an application, the Government will provide the minimum support required for the project to go ahead.
In view of the significant amounts of public expenditure involved, DTI closely monitors the progress of a supported programme. Payments are linked to actual expenditure by the company and to the achievement of specific technical milestones. Information is also required from the company on the development programme, the commercial position of the project and the financial position of the company.
Most Western countries with aerospace industries have some form of launch investment (including France, Germany, Spain, Netherlands and Italy). The US supports its industry by indirect measures, in particular the very large R&D programmes run by NASA and the Department of Defense. A range of international agreements exists to regulate financial support given to industry by Governments, and these apply equally to launch investment. Any offer of launch investment must therefore be consistent with the UK’s international obligations.
Principally, these are the European Union’s State Aid rules and the EC/US Agreement on support for large civil aircraft. This Agreement, signed in July 1992, covers all Airbus aircraft and aircraft with a capacity of 100 or more seats manufactured in the US. The Agreement recognises the two main types of support as direct support (such as launch investment), and indirect support (such as the R&D programmes run in the US). The main provisions are:
direct Government support limited to 33% of total development cost of a project;
direct support to be repaid to the Government within 17 years at a rate of return at least marginally above the cost of Government borrowing;
Indirect support limited to 3% of the civil aircraft industry’s annual commercial turnover;
detailed transparency requirements on both direct and indirect supports.
http://www.dti.gov.uk/aerospace/launch-investment.htm
says about the A380 "launch investment" - ie it's not "given" to them without any return as is implied in Wino's posts. Also some interesting UK govt views on other countries' "aid" programmes.
LAUNCH INVESTMENT
Launch Investment is a risk-sharing Government investment in the design and development of specific civil aerospace projects in the UK. It has been used to support developments of airframes (or parts of airframes, such as wings), helicopters and aero engines. The investment is not a grant and is repayable to the Government at a real rate of return, usually via levies on sales of the product developed. By this means, the Government shares in the risk of the project, since the company may not achieve sales at the level or price forecast. Launch investment is available only to the aerospace sector and stems from the provisions of the Civil Aviation Act 1982.
Significant projects supported in the past include the Airbus A320 and A330/340 programmes. The A320 investment has already been repaid to the Government, and continues to provide a return. The A330/340 is contributing a steady stream of funds to the Exchequer, and is expected to pay for itself in the medium term. In November 1997, the Government reached agreement with Rolls-Royce to invest in new engines in the Trent family. This included the Trent 500 for the new Airbus A340-500/600 project, and also upgraded Trent 800 engines for the Boeing 777 family.
On 13 March 2000 the Government announced a new launch investment partnership with BAE SYSTEMS (Airbus UK) to support their participation in the Airbus A3XX ‘super-jumbo’ (subsequently launched as the A380). BAE SYSTEMS is now a 20% shareholder in the Airbus Integrated Company (AIC) with the European Aeronautic, Defence and Space Company (EADS), holding the remaining 80%. Airbus UK, the Centre of Excellence for wing design and manufacture, became a subsidiary company to the AIC and will receive the Launch Investment. This is the largest launch investment announced to date. More recently, the Government has also announced that it has joined with Rolls-Royce in an investment to develop the Trent 900 for the A380 and also the Trent 600 for future Boeing projects.
Launch investment enables the company and the Government to share the typically very high level of risk in aerospace projects, characterised by high costs, long payback periods, and a dearth of private sector investors. Launch Investment also recognises that modern aerospace projects are highly internationally mobile, and it enables the Government to capture valuable projects for the UK that might otherwise be carried out abroad.
The provision of launch investment is entirely discretionary. There is no formal scheme, promotion or budget for launch investment. Each launch investment application is considered on its merits against a range of established criteria and also, by the Treasury, against public expenditure constraints.
An applicant must demonstrate: that the project is technically and commercially viable; that Government investment is essential for the project to proceed on the scale and in the time-scale specified in the application; and that Government will recoup the investment at a real rate of return.
The Government undertakes a detailed assessment of the company’s business case and its claim that the project cannot be funded by alternative means. In addition, the Government assesses the technical viability of the project and the market for the product. Finally, an assessment is made of the wider benefits of the project to the economy beyond the company itself. These can include the spin-off of new technologies or production methods with wider applications in other sectors, or transferable improvements to the skill base. If it is decided to support an application, the Government will provide the minimum support required for the project to go ahead.
In view of the significant amounts of public expenditure involved, DTI closely monitors the progress of a supported programme. Payments are linked to actual expenditure by the company and to the achievement of specific technical milestones. Information is also required from the company on the development programme, the commercial position of the project and the financial position of the company.
Most Western countries with aerospace industries have some form of launch investment (including France, Germany, Spain, Netherlands and Italy). The US supports its industry by indirect measures, in particular the very large R&D programmes run by NASA and the Department of Defense. A range of international agreements exists to regulate financial support given to industry by Governments, and these apply equally to launch investment. Any offer of launch investment must therefore be consistent with the UK’s international obligations.
Principally, these are the European Union’s State Aid rules and the EC/US Agreement on support for large civil aircraft. This Agreement, signed in July 1992, covers all Airbus aircraft and aircraft with a capacity of 100 or more seats manufactured in the US. The Agreement recognises the two main types of support as direct support (such as launch investment), and indirect support (such as the R&D programmes run in the US). The main provisions are:
direct Government support limited to 33% of total development cost of a project;
direct support to be repaid to the Government within 17 years at a rate of return at least marginally above the cost of Government borrowing;
Indirect support limited to 3% of the civil aircraft industry’s annual commercial turnover;
detailed transparency requirements on both direct and indirect supports.
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Hi Dr Dave & brabazon,
IMHO, the FSC tax regime was in fact implemented to level the playing field between the very favorable tax regimes we (in Europe) have benefited from since World War II.
Some EU countries such as France or The Netherlands were also found to have illegal tax regime in the past, but the US decided not to pursue the case through the WTO. (Note that EADS is incorporated in The Netherlands & while Airbus is incorporated in France)
Please check those links for more info.
http://www.iie.com/publications/pb/pb02-10.pdf
http://www.iie.com/publications/papers/hufbauer0300.htm
http://www.iie.com/publications/papers/hufbauer0102.htm
Ironically, to comply with the WTO ruling, the US will have to adopt a export tax system similar to the European ones which will further help Boeing as for some strange reasons, the European export tax system allow for even more export subsidies than the current US one (FSC) while being legal (by WTO standards).
Note that Airbus claims to import up to 40% of the value of its airliners from the US thus benefiting from the FSC as well.
Interesting as well, is the fact that bribing was not only perfectly legal but tax deductible in France until 2000.
To compare the government support of the US vs. the EU, I suggest you check the following link (a bit outdated but worthwhile)
http://www.wws.princeton.edu/cgi-bin...112/911210.PDF
While the US has to deal with risk-adjusted rate of returns, the EU does not, thus further helping Airbus.
This could also be of interest:
http://web.mit.edu/ipc/www/Subsidies.pdf
Or this:
Government Support for Airbus
The Airbus Integrated Company - a partnership
of the French-German-Spanish European
Aeronautic, Defense, and Space Company
(EADS-80 percent equity share) and the UK's
BAE Systems (20 percent equity share) - is the
second largest aerospace company in the world.
With about half the new aircraft sales
worldwide over the last few years, Airbus is a
mature company that should face the same
commercial risks as its global com petitors.
Since the inception of Airbus in 1967, the
governments of France, Germany, Spain and
the UK have provided direct subsidies to their
respective Airbus member companies to aid in
the development, production and marketing of
Airbus civil aircraft. Airbus member
governments have borne a large portion of the
development costs for all Airbus aircraft
models and provided other forms of support,
including equity infusions, debt forgiveness,
debt rollovers and marketing assistance,
including political and economic pressure on
purchasing governments. The United States
therefore is concerned about the prospect for
further subsidization of Airbus by EU Member
States governments. Any distortions caused by
illegal subsidies would only exacerbate an
already difficult situation for the large civil
aircraft industry, which is facing significant
losses in the wake of the terrorist attacks of
September 11, 2001 as well as a cyclical down
turn of the economy.
In 2001, the EU announced that seven of the
nine EU Member State governments that have
companies participating in the Airbus A380
superjumbo airliner project have committed a
total of $3.1 billion to Airbus for the
development of the aircraft, the total cost of
which is estimated to be $12 billion. France
has committed to provide 1.213 billion Euro in
reimbursable advances. The German government
has committed to provide 1 billion euro in loans.
The British government announced a
commitment of 530 million pounds to underwrite
BAE System's participation in the project. The
repayment terms and interest rates for these loans are not expected to be
equivalent to those available from private lenders. The loan
repayment obligations are to be success
dependent, which means they are repayable only
through royalties on aircraft sold, and at interest rates that do not
reflect the commercial risks involved.
In addition, the city of Hamburg is spending
some 750 million euro to lengthen the runway
and expand the facilities for Airbus at the EADS Hamburg-Finkenwerder
airport to accommodate the expansion of EADS Airbus assembly there,including
that of the A380. French national and local authorities plan to provide 46
million euro($45.8 million) in aid for road expansion and facility
construction for Airbus in Toulouse.
These government funds appear to constitute
production support for the manufacture of the
A380. Furthermore, the EU's aeronautics
research programs are driven significantly by a
policy intended to enhance the international
competitiveness of the European civil aeronautics industry. Through these
research programs, the EC and many of the Airbus member governments have
provided additional funding worth billions of dollars to support the
development of Airbus aircraft programs, including the A380.
European officials claim that Member State
support is in compliance with the 1992 U.S.-EU
Agreement on Large Civil Aircraft. However,
the United States believes that government
support to Airbus raises serious concerns about
the Member States' adherence to their bilateral
and multilateral obligations, including the WTO
Agreement on Subsidies and Countervailing
Measures (SCM Agreement). The United States
has urged the Airbus member governments to
ensure that the terms and conditions of their
A380 support are consistent with commercial
terms, reflecting both their international
obligations and the fact that Airbus is now a
highly competitive global producer of aircraft.
The United States also believes increased
transparency regarding government support to
large civil aircraft manufacturing will contribute to better understanding
and could foster greater cooperation in the aerospace industry.
Belgium:
The Government of Belgium and
Belgian regional authorities subsidize Belgian
aircraft component manufacturers (operating as
the Belairbus/Flabel consortium), which supply
parts to the Airbus Integrated Company. In
November 2000, the Belgian federal
government reached an agreement with the
three regional governments responsible for
aviation research and development on a Euro
195 million ($195 million) package for the
development and prefinancing of components
for the new Airbus A380. Since then,
Belairbus has already received orders worth
$1.3 billion for the A380 from Airbus.
Although the regional governments of Wallonia, Flanders and Brussels are
usually responsible for industrial assistance, this authority has been ceded
to the national level for the A 380 project. There is concern that these
subsidies may be in violation of the U.S.-
EU 1992 Agreement on Trade in Large Civil
Aircraft and/or the WTO subsidies agreement.
The Government of Belgium states that they
have discontinued an earlier Belgian exchange
rate subsidy program which appeared to be
similar to a foreign exchange rate guarantee
program provided by the German government
for its Airbus partner company and its
suppliers.
France:
In addition to the 1.213 billion Euro in reimbursable advances for
development of the
Airbus A380 super-jumbo aircraft, the
Government of France will provide an additional 59 million Euros ($58.8
million) in
reimbursable advances to other aero-structure
companies, which have concluded partnership
agreements with Airbus for development of the
airframe. Further, the government-owned
French engine manufacturer SNECMA will receive 102 million Euros ($101.6
million) in
support under a royalty-based system authorized by the European Commission
for
SNECMA's development work on a family of
large engines, including its participation in the Engine Alliance (a joint
venture between
General Electric Aircraft Engines and Pratt and
Whitney). The French Government states that
this support for engine development is not
covered by the U.S.-EU 1992 Agreement on
Trade in Large Civil Aircraft.
IMHO, the FSC tax regime was in fact implemented to level the playing field between the very favorable tax regimes we (in Europe) have benefited from since World War II.
Some EU countries such as France or The Netherlands were also found to have illegal tax regime in the past, but the US decided not to pursue the case through the WTO. (Note that EADS is incorporated in The Netherlands & while Airbus is incorporated in France)
Please check those links for more info.
http://www.iie.com/publications/pb/pb02-10.pdf
http://www.iie.com/publications/papers/hufbauer0300.htm
http://www.iie.com/publications/papers/hufbauer0102.htm
Ironically, to comply with the WTO ruling, the US will have to adopt a export tax system similar to the European ones which will further help Boeing as for some strange reasons, the European export tax system allow for even more export subsidies than the current US one (FSC) while being legal (by WTO standards).
Note that Airbus claims to import up to 40% of the value of its airliners from the US thus benefiting from the FSC as well.
Interesting as well, is the fact that bribing was not only perfectly legal but tax deductible in France until 2000.
To compare the government support of the US vs. the EU, I suggest you check the following link (a bit outdated but worthwhile)
http://www.wws.princeton.edu/cgi-bin...112/911210.PDF
While the US has to deal with risk-adjusted rate of returns, the EU does not, thus further helping Airbus.
This could also be of interest:
http://web.mit.edu/ipc/www/Subsidies.pdf
Or this:
Government Support for Airbus
The Airbus Integrated Company - a partnership
of the French-German-Spanish European
Aeronautic, Defense, and Space Company
(EADS-80 percent equity share) and the UK's
BAE Systems (20 percent equity share) - is the
second largest aerospace company in the world.
With about half the new aircraft sales
worldwide over the last few years, Airbus is a
mature company that should face the same
commercial risks as its global com petitors.
Since the inception of Airbus in 1967, the
governments of France, Germany, Spain and
the UK have provided direct subsidies to their
respective Airbus member companies to aid in
the development, production and marketing of
Airbus civil aircraft. Airbus member
governments have borne a large portion of the
development costs for all Airbus aircraft
models and provided other forms of support,
including equity infusions, debt forgiveness,
debt rollovers and marketing assistance,
including political and economic pressure on
purchasing governments. The United States
therefore is concerned about the prospect for
further subsidization of Airbus by EU Member
States governments. Any distortions caused by
illegal subsidies would only exacerbate an
already difficult situation for the large civil
aircraft industry, which is facing significant
losses in the wake of the terrorist attacks of
September 11, 2001 as well as a cyclical down
turn of the economy.
In 2001, the EU announced that seven of the
nine EU Member State governments that have
companies participating in the Airbus A380
superjumbo airliner project have committed a
total of $3.1 billion to Airbus for the
development of the aircraft, the total cost of
which is estimated to be $12 billion. France
has committed to provide 1.213 billion Euro in
reimbursable advances. The German government
has committed to provide 1 billion euro in loans.
The British government announced a
commitment of 530 million pounds to underwrite
BAE System's participation in the project. The
repayment terms and interest rates for these loans are not expected to be
equivalent to those available from private lenders. The loan
repayment obligations are to be success
dependent, which means they are repayable only
through royalties on aircraft sold, and at interest rates that do not
reflect the commercial risks involved.
In addition, the city of Hamburg is spending
some 750 million euro to lengthen the runway
and expand the facilities for Airbus at the EADS Hamburg-Finkenwerder
airport to accommodate the expansion of EADS Airbus assembly there,including
that of the A380. French national and local authorities plan to provide 46
million euro($45.8 million) in aid for road expansion and facility
construction for Airbus in Toulouse.
These government funds appear to constitute
production support for the manufacture of the
A380. Furthermore, the EU's aeronautics
research programs are driven significantly by a
policy intended to enhance the international
competitiveness of the European civil aeronautics industry. Through these
research programs, the EC and many of the Airbus member governments have
provided additional funding worth billions of dollars to support the
development of Airbus aircraft programs, including the A380.
European officials claim that Member State
support is in compliance with the 1992 U.S.-EU
Agreement on Large Civil Aircraft. However,
the United States believes that government
support to Airbus raises serious concerns about
the Member States' adherence to their bilateral
and multilateral obligations, including the WTO
Agreement on Subsidies and Countervailing
Measures (SCM Agreement). The United States
has urged the Airbus member governments to
ensure that the terms and conditions of their
A380 support are consistent with commercial
terms, reflecting both their international
obligations and the fact that Airbus is now a
highly competitive global producer of aircraft.
The United States also believes increased
transparency regarding government support to
large civil aircraft manufacturing will contribute to better understanding
and could foster greater cooperation in the aerospace industry.
Belgium:
The Government of Belgium and
Belgian regional authorities subsidize Belgian
aircraft component manufacturers (operating as
the Belairbus/Flabel consortium), which supply
parts to the Airbus Integrated Company. In
November 2000, the Belgian federal
government reached an agreement with the
three regional governments responsible for
aviation research and development on a Euro
195 million ($195 million) package for the
development and prefinancing of components
for the new Airbus A380. Since then,
Belairbus has already received orders worth
$1.3 billion for the A380 from Airbus.
Although the regional governments of Wallonia, Flanders and Brussels are
usually responsible for industrial assistance, this authority has been ceded
to the national level for the A 380 project. There is concern that these
subsidies may be in violation of the U.S.-
EU 1992 Agreement on Trade in Large Civil
Aircraft and/or the WTO subsidies agreement.
The Government of Belgium states that they
have discontinued an earlier Belgian exchange
rate subsidy program which appeared to be
similar to a foreign exchange rate guarantee
program provided by the German government
for its Airbus partner company and its
suppliers.
France:
In addition to the 1.213 billion Euro in reimbursable advances for
development of the
Airbus A380 super-jumbo aircraft, the
Government of France will provide an additional 59 million Euros ($58.8
million) in
reimbursable advances to other aero-structure
companies, which have concluded partnership
agreements with Airbus for development of the
airframe. Further, the government-owned
French engine manufacturer SNECMA will receive 102 million Euros ($101.6
million) in
support under a royalty-based system authorized by the European Commission
for
SNECMA's development work on a family of
large engines, including its participation in the Engine Alliance (a joint
venture between
General Electric Aircraft Engines and Pratt and
Whitney). The French Government states that
this support for engine development is not
covered by the U.S.-EU 1992 Agreement on
Trade in Large Civil Aircraft.
I think some people aren't aware that Airbus is no longer a consortium of worksharing companies but a single, unitary co.
"The UK was apparently forced to pony up the cash..."
In the sense that without it no-one would get any manufacturing because the thing wouldn't have happened.
"In addition, the city of Hamburg is spending
some 750 million euro to lengthen the runway
and expand the facilities for Airbus at the EADS Hamburg-Finkenwerder
airport to accommodate the expansion of EADS Airbus assembly there,including
that of the A380. French national and local authorities plan to provide 46
million euro($45.8 million) in aid for road expansion and facility
construction for Airbus in Toulouse."
Waahhh!! Waaahh! Those dastardly European governments build roads! Unlike US Federal highways....paid for, of course, solely by....errrrrrr - the federal government! Clue in the name! Does anyone perhaps recall the US Defence Plants Agency? And what chance do you think that BAE or indeed anyone else have of getting the faintest sniff of the US Dept of Defence's gigantic entitlement programmes for the arms industry?
BTW, you'd have to be a pork-barreling US politician to convince yourself that having only one serious airliner manufacturer in the world would be more competitive than having two....theoretically competition increases efficiency and reduces prices, so the US economy might actually benefit from launch aid....
"The UK was apparently forced to pony up the cash..."
In the sense that without it no-one would get any manufacturing because the thing wouldn't have happened.
"In addition, the city of Hamburg is spending
some 750 million euro to lengthen the runway
and expand the facilities for Airbus at the EADS Hamburg-Finkenwerder
airport to accommodate the expansion of EADS Airbus assembly there,including
that of the A380. French national and local authorities plan to provide 46
million euro($45.8 million) in aid for road expansion and facility
construction for Airbus in Toulouse."
Waahhh!! Waaahh! Those dastardly European governments build roads! Unlike US Federal highways....paid for, of course, solely by....errrrrrr - the federal government! Clue in the name! Does anyone perhaps recall the US Defence Plants Agency? And what chance do you think that BAE or indeed anyone else have of getting the faintest sniff of the US Dept of Defence's gigantic entitlement programmes for the arms industry?
BTW, you'd have to be a pork-barreling US politician to convince yourself that having only one serious airliner manufacturer in the world would be more competitive than having two....theoretically competition increases efficiency and reduces prices, so the US economy might actually benefit from launch aid....
Union Goon
Join Date: Feb 2000
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Steamchicken,
Competition is good if it is fair.
The ability to borrow vast sums of cash without commercial consideration at well below market rates with no real penalty for not paying it back is hardly fair however.
What is happening is a viable commercial enterprise is being gutted by the European governments.
Cheers
Wino
Competition is good if it is fair.
The ability to borrow vast sums of cash without commercial consideration at well below market rates with no real penalty for not paying it back is hardly fair however.
What is happening is a viable commercial enterprise is being gutted by the European governments.
Cheers
Wino
Join Date: Mar 2003
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Steamchicken,
Competition is good if it is fair.
The ability to borrow vast sums of cash without commercial consideration at well below market rates with no real penalty for not paying it back is hardly fair however.
What is happening is a viable commercial enterprise is being gutted by the European governments.
Cheers
Wino
Competition is good if it is fair.
The ability to borrow vast sums of cash without commercial consideration at well below market rates with no real penalty for not paying it back is hardly fair however.
What is happening is a viable commercial enterprise is being gutted by the European governments.
Cheers
Wino
The effective ability of a governement to work in partnership with industry effectivly to provide the needs for viable comercial enterprize is good. The Europeans Governments can work effectivly with Airbus towards a Common goal is co-operation.
This contrast vastly with the Washington State Government which for many years has failed to invest enough into the states trasnporation infrastructure....
Some may read it as government subisidies, but other can call it the governements responsibility. It is the governemnt's responsiblity to support industries and help them become comercialy viable.
For those who say that the European are unfairly helping Airbus. I am sure the US fedral goverment has in the past subsidized other US industries directly or indirectly..
As for business model. It was intresting watching the Boeing 777 PTQ (put together quickly) video and the A340-600 assembly video...........select 777 PTQ from the menu hereB777 PTQ
select Building A340-600 here...building A340-600
From the video , you can see that the relationship between at boeing and the people which build the parts of the aircraft as employee - employer mostly.
For Airbus, a more significatant majority is outsourcer-contractor......
Obviously there are benifits and disadvantages of one over another..... I boeing you have more direct control....but you have to bear the extra cost of employing so many people (ie bear the overhead)...For airbus, I would belive this cost is attached to the Which one is more effeicent for the airplane business ? hard to say.....but alot of other manufacturing industries have went subcontractor and airbus pays for the direct labor cost of the sub assembly.....
down the out sourcing sub contracting route.....
I suspect Boeing is going to survive, but its going to follow the airbus way of making planes
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Let's look at the A320. It was launched in 1984 when Airbus just finished developing the A310 and A300-600. (FWIW, the A300/310 was a complete financial failure.) Obviously, it was prior to the 1992 GATT agreement, so it was fully funded by European governments. According to the UK government, they "broke even" on the A320 investment in 1997 or 98 after some 1,100+ A320s were delivered. However, when I checked out the numbers, it appeared to me that "breaking even" meant recovering the investment at 0% interest. The A320 has been selling very well. Thus, there is no question that the UK government is now having a "real" return on their original A320 investment probably at a rate of around 5% or so. However, the market rate at that time was in the low teens. The difference between compounding $2 billion at 5% and, say, 13% interest rate for 14 years (when the UK government claimed "breaking even") is over $7 billion. The $7billion figure is not meant to be an accurate estimate. It just provides a rough idea. This is a tremendous saving on cost for Airbus. For Boeing, a rough estimation is to breakeven after 400 deliveries in no more than 10 years after service entry. When it took the UK government 14 years and 1,100+ deliveries to "break even," Airbus has the audacity to claim they will break even on the A380 only after 250 deliveries, I think people really have to question Airbus' credibility.
A common rebuttal here is how about all those US indirect subsidies. Let's look at them:
1. Government/defense contracts: prior to Boeing's acquisition of MDC, Boeing's non-commercial operations accounted for 10-30% of their revenue. Aerospatiale, BAe, DASA, and CASA consistently had larger combined revenue from government contracts than Boeing had. Even with the MDC acquistion, Boeing hasn't been significantly more dependent on government contracts than EADS and BAE Systems combined, especially if we look on a relative basis, namely, the ratio between commercial and non-commercial revenue.
2. Government-supported R&D: there is no question NASA has a large budget, but NASA does not support Boeing or commercial aircraft industry alone. There are plenty of European government agencies that support R&D directly applicable to Airbus. If Boeing is quilty on this one, so is Airbus.
3. US Exim bank: while the EU does not have an equivalent organized operation, European national banks have helped airlines in securing loans for purchasing Airbus planes at very "favorable" rates. Once again, it's not a Boeing-only privilege that Airbus doesn't have.
4. Tax breaks: I don't know enough to comment. I guess if WTO ruled against the US, then the US is guilty.
As Wino said, competition is good if it's fair, but I'm afraid Airbus has an unfair advantage.
A common rebuttal here is how about all those US indirect subsidies. Let's look at them:
1. Government/defense contracts: prior to Boeing's acquisition of MDC, Boeing's non-commercial operations accounted for 10-30% of their revenue. Aerospatiale, BAe, DASA, and CASA consistently had larger combined revenue from government contracts than Boeing had. Even with the MDC acquistion, Boeing hasn't been significantly more dependent on government contracts than EADS and BAE Systems combined, especially if we look on a relative basis, namely, the ratio between commercial and non-commercial revenue.
2. Government-supported R&D: there is no question NASA has a large budget, but NASA does not support Boeing or commercial aircraft industry alone. There are plenty of European government agencies that support R&D directly applicable to Airbus. If Boeing is quilty on this one, so is Airbus.
3. US Exim bank: while the EU does not have an equivalent organized operation, European national banks have helped airlines in securing loans for purchasing Airbus planes at very "favorable" rates. Once again, it's not a Boeing-only privilege that Airbus doesn't have.
4. Tax breaks: I don't know enough to comment. I guess if WTO ruled against the US, then the US is guilty.
As Wino said, competition is good if it's fair, but I'm afraid Airbus has an unfair advantage.
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1)Watch the 7E7 carefully - 2)watch the Boeing board of directors decision this fall for program go-ahead authorization - Boeing HAS to do the 7E7 to keep engineering "critical mass". Boeing has a pig in a poke problem - they are sponges for US military spending & programs - but have this losing commercial airplane business. And therefore are beholden to the US political machine in Washington - what do you think will happen to Boeing military spending if Boeing tries to exit the Commercial A/P business ?? Boeing is the single largest employeer & contributor to the foreign trade balance. You don't muck with this without political reprocussions. No doubt we are in a military economy - Ive heard the Republicans are going to run the former Supreme Commander of NATO as Vice President next go-around - if that doesnt say something about the US's future military objectives & spending - I dont know what does. Then we have old "plow-shares" Hillary.. Democrats won't have a chance with a shrill like her.. & a fraud like Kerry.. As far as AIRBUS - the TGV, Concorde & recently the A380 will show the Europeans have an appetite for programs that are too big to fail ! Oh yea - the US EX IMPORT BANK IS SUBSIDIZED BY THE STUPID AMERICAN TAXPAYER - to make loans to risky nations that are not credit worthy by bank standards - Sooo it is the taxpayer that gets hosed on these screwy foreign deals .. Concerning AIRBUS foreign subsidy's - do a search on "Megaliner" - in the EU research contracts at the TUDelf Library - there are tons of research contract awards for the A380 by the EU with the buzzword megaliner in them.. The EU has subsidized the hell out of this airplane since 1994 ..
