dimanche 3 novembre 2013

Airbus, Boeing and the state intervention

Airbus and Boeing operate in a strategic sector requiring huge investment and years of development to come up with new planes. If they face some issues during the advancement of a project, it can lead to delays in the delivery, higher costs and even breakdowns like with Boeing's Dreamliner. Moreover, the airlines can request a discount on their orders since this could be harmful for them. 

For instance, recently Boeing had issues with the Dreamliner's ion battery and Japanese airlines – already using several 787 Dreamliner – were forced to cancel hundreds of flights because of these technical incidents.

Because of the risk taken by Airbus or Boeing, no banks would finance their project unless the State brings its support. This is materialized by subsidies. Airbus for example is a subsidiary of the group EADS with both public and private shareholders. Airbus received subsidies for the A380 program and recently for the A350 by the different public investors in EADS (France, Great Britain, Germany, Spain). On the other side of the Atlantic, Boeing is a private company but they also obtain government aids through their military programs. These innovations are then applied to the commercial planes.

For many years, the two firms have been arguing about the state intervention and the aids. Both claim that these are unfair and the bone of contention lies in the amount of the subsidies. They asked the WTO to carry out an investigation and to be the mediator but it doesn't have the power to condemn one of the actors.
It's a war going on between the two major actors of this oligopolistic market. A lot of money and jobs are at stake and this industrial sector is strategic for governments as it influences the balance of trade through exports.


Aucun commentaire:

Enregistrer un commentaire