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Article: Airbus Likely To Request State Aid  
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Posted (8 years 4 months 1 week 3 days 20 hours ago) and read 7541 times:

I must say I'm not surprised, although the timing could have been better. Maybe a trial balloon to test the waters? Maybe a negotiating tactic? However, the article points to the possibility of a trade war and that would NOT be good. Note that Mr. Aboulafia says:

Quote:
"This is no longer a mere product-development launch aid, it is a rescue package: This aid is absolutely essential," said Richard Aboulafia, an aerospace analyst at Teal Group, an aerospace and defense consulting group based in Fairfax, Virginia. "The prospect of a trade war has racheted up a notch."

Full article here:
Airbus looks likely to request state aid

[Edited 2006-06-19 02:02:35]

[Edited 2006-06-19 02:03:26]
[All edits for spelling!]

[Edited 2006-06-19 02:04:15]


"When all is said and done, more will be said than done".
123 replies: All unread, showing first 25:
 
User currently offlineAither From South Korea, joined Oct 2004, 859 posts, RR: 0
Reply 1, posted (8 years 4 months 1 week 3 days 20 hours ago) and read 7508 times:

The launch aid request for the A350 was postponed last year but it was always clear they would request some as the 787 benefit from large subsidies.

Today Aboulafias and alike are keen to talk about "rescue plan" for Airbus. The fact is this request was expected anyway.

[Edited 2006-06-19 02:11:34]


Never trust the obvious
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 2, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7469 times:

Quoting Aither (Reply 1):
Today Aboulafias and alike are keen to talk about "rescue plan" for Airbus. The fact is this request was expected anyway.

Just to be clear...you disagree with Mr. Aboulafia's characterization of would be aid rendered to Airbus at this point as a "rescue package"?



"When all is said and done, more will be said than done".
User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 3, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7453 times:

The bad news out of Toulouse continues.....

Is Airbus calling the loans a "Rescue Package" for public relations reasons or are things really that bad?

And, it will be interesting to see how the state aid issue flies after last weeks stock scandal.

One thing is for sure, things will get even worse before things get better....look for a major trade dispute and for Boeing and Washington to flip out.

Quoting Aither (Reply 1):
The launch aid request for the A350 was postponed last year but it was always clear they would request some as the 787 benefit from large subsidies.


[Edited 2006-06-19 02:11:34]

Huh? What subsidies does the 787 benefit from?


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2826 posts, RR: 42
Reply 4, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7453 times:

Quoting Aither (Reply 1):
The launch aid request for the A350 was postponed last year but it was always clear they would request some as the 787 benefit from large subsidies.

The Airbus cheerleaders are fond of repeating this, and then ignore the fact that the A380 also gets the exact kind of logistical support aide as Boeing has received on top of the launch aide.

Airbus will loose this fight in the WTO.

That being said, Airbus has got to be feeling the pinch with ~8 Billion Euro's additional expense that wasn't projected for this year.


From the article:

Quote:

He stopped short of saying that Airbus would request the aid - which could run into billions of euros - but called the money "indispensable" for establishing what he called a level playing field with Boeing. "Launch aid is the only available system right now," he said.

No, they can do the exact same thing Boeing does, get the banks and the free market to capitalize this.

Quote:

However, a senior Airbus executive, speaking on condition of anonymity, stressed that any decision to ask for the loans would be largely symbolic at first

If it's symbolic, why does Airbus want it?

Quote:


"For Airbus, launch aid is becoming topical again," one executive familiar with the company's financial situation said. "When the coffers are empty the pressure rises."

Hmm. Seems like Airbus will admit what the cheerleaders around here won't.

Quote:

"We remain ready to put launch aid on the table if there is a commensurate offer on the U.S. side," Power said.

That's the problem right there. Launch aide was permitted when Europe was complaining about how all of the aircaft manufacturors were American. America allowed the launch aide and rejected the exclusivity agreements that Boeing had. Now Airbus and the EU wan't more concessions for something that the WTO will find illegal.

WTO is there for a reason. Time to use it. I love the A320. I think it is a great plane. I will root for Airbus if there is a level playing field. Playing these kinds of games turns me off to Airbus as a company.


User currently offlineSpartanmjf From United States of America, joined Nov 2005, 506 posts, RR: 0
Reply 5, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7439 times:

Again, the evidence that Airbus and, by extension, EADS is anything but a state-run manufacturing concern is bubbling to the top.

A normal company would have to reorganize itself and seek investment from private capital markets. This is what its primary competitor, Boeing, had to do. But then, Airbus is no Boeing.



"Nuts to the man in 21D!"
User currently offlineBoeingFever777 From United States of America, joined Jul 2009, 409 posts, RR: 53
Reply 6, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7439 times:

I didn't think they could request help from the gov. being this would be classed as subsidies. Why would they call it a "rescue package" Airbus is not that bad off are they?

Quoting Aither (Reply 1):
787 benefit from large subsidies.

Rubbish... links?



Faire du ciel le plus bel endroit de la terre.
User currently offlineHalls120 From , joined Dec 1969, posts, RR:
Reply 7, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7364 times:

Quoting AirFrnt (Reply 4):
The Airbus cheerleaders are fond of repeating this, and then ignore the fact that the A380 also gets the exact kind of logistical support aide as Boeing has received on top of the launch aide.

Airbus will loose this fight in the WTO.

Maybe. I'm not so sure that the WTO would rule against Airbus, even if the merits suggest they should.

Quoting Spartanmjf (Reply 5):
Again, the evidence that Airbus and, by extension, EADS is anything but a state-run manufacturing concern is bubbling to the top.

A normal company would have to reorganize itself and seek investment from private capital markets. This is what its primary competitor, Boeing, had to do. But then, Airbus is no Boeing.

Airbus supports like to say Airbus is no different from Boeing, but the fact is, it is.

When the A380, was unveiled, I seem to recall many European government officials present at the roll out, crowing about the achievement "the old Europe" had produced. Funny thing this, I don't ever recall seeing a President of the US attend the public unveiling of a Boeing, Douglas, or Lockheed commercial aircraft - or for that matter, at any new product introduced by a US company operating in the private sector. And that is the difference.

And yes, sometimes the US government steps in to support a US corporation, like they did with Chrysler. But recall that Chrysler repaid their loans to the US treasury, and left the dole. Unlike Airbus, which seems to have a continuing fixation on European taxpayer funds.....


User currently offlinePar13del From Bahamas, joined Dec 2005, 7384 posts, RR: 8
Reply 8, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7348 times:

Reality check here, if Airbus needs launch aid or rescue package whatever you want to call it as a result of the A380 / A350 fiasco they will get it.

EADS is not a public company, so for the most part its books are not open to the public, so the "influx" could be hidden on their books and the public treasury of the govts. involved.

EU govts set up airbus and the only way it will fail is if the voters in all the involved countries demand it, and guess what, they won't as it is their jobs they would be voting out. So now what?

Even if the WTO votes against airbus, it will be the banana issue all over again. The WTO ruled against the EU in that case and still nothing has been done. The EU and airbus will decide that the penalties against them are out weighed by the national interest, so what can the US do?

I say stock it up, allow the EU to give the launch aid publically, everyone know when and how much. Demand the right for the US govt and or its state govt. to offset if they so wish. Essentially this means nothing because the US does not operate like that, but I'm certain some creative lawyers and accoutants in the US could find a way to level the playing field. How about offering discounts to US airlines if they bought Boeing a/c and penalities if they bought govt subsidized airbus a/c?

Would converting the entire US market to Boeing a/c be worth it to the US?
Correct me if I'm wrong here, but isn't the US the largest operator of airbus a/c?

Just a thought


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 9, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7342 times:

Quoting Halls120 (Reply 7):
Maybe. I'm not so sure that the WTO would rule against Airbus, even if the merits suggest they should.

Unfortunately, and this is just my opinion, that no matter how the WTO rules, the "losing" side will most likely ignore the ruling, sparking a trade war that could ultimately threaten the WTO itself. The stakes here are very high. Neither side can back down politically without some sort of face saving "quid pro quo" that the politicians can proclaim as a "victory". I sense that the U.S. side is willing to take this to the extreme and the EU seems quite willing to do the same. The subsidies issue chafes on this side of the Atlantic and the EU politicians will eat ground glass before they see Airbus surrender ground that they have painstakingly won over the last three decades. These negotiations are extremely important and must produce a breakthrough or this will get very, very ugly. Again, just my USD $0.02....

[Edited 2006-06-19 02:51:19]


"When all is said and done, more will be said than done".
User currently offlineTrex8 From United States of America, joined Nov 2002, 4787 posts, RR: 14
Reply 10, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7314 times:
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even if the WTO rules against Airbus, the US are in no position to enforce anything given they don't abide themselves most of the time by WTO findings against the US. Plus I can't see the WTO finding it kosher for tax subsidies which only come into effect essentially after one specific manufacturer makes a specific product and which would clearly only benefit that manufcaturer and not a competitor. The effect is likely both sides will lose and yes each side has shot the other but they also got hit and are bleeding.
Besides when all those US suppliers to Airbus start moaning after Airbus gets hit and Boeing gets more business, which they will send to Korea and China and not keep in the US - don't kid yourself one second that won't happen, it'll be like the steel debacle a few years ago. Help the big US steel makers and kill all the US manufacturers using the steel.


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 11, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7314 times:

Quoting Par13del (Reply 8):
Even if the WTO votes against airbus, it will be the banana issue all over again. The WTO ruled against the EU in that case and still nothing has been done. The EU and airbus will decide that the penalties against them are out weighed by the national interest, so what can the US do?

Our posts crossed, but I completely agree with your sentiments. A parallel situation that Canadian A.netters never tire of pointing out is the soft lumber issue where the WTO ruled in favor of Canadian exporters and the U.S. has not complied. I can see the EU ignoring an unfavorable ruling against EADS; I can see the U.S. upping the ante if the ruling goes in favor of "launch aid". It will be ugly and the spill over could likely enter into agriculture, and many other areas. Unfortunate since there may be one last chance at the Doha round of trade negotiations to find a breakthrough in the agricultural subsidies issue that may assist third world economies. Again, these are my personal sentiments and reflections.



"When all is said and done, more will be said than done".
User currently offlineJano From Slovakia, joined Jan 2004, 827 posts, RR: 4
Reply 12, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7299 times:

Quoting Par13del (Reply 8):
Correct me if I'm wrong here, but isn't the US the largest operator of airbus a/c?

It's gotta be one of AF or UA or NW. I do not think it is US.



The Widget Air Line :)
User currently offlineBoeingBus From United States of America, joined May 2004, 1597 posts, RR: 17
Reply 13, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7286 times:

subsidies didnt help Airbus have good judgment, forcasting what airlines, or hire top shelf management.

I don't understand the reasoning behind why we get so fixated on Airbus being supported by several EU countries... BTW, I include myself in this group. I dont think its fare... but it seems that taxpayers money isn't really helping their cause??? so let it be...

Aibus is number one in orders and deliveries because Boeing was asleep at the wheel.



Airbus or Boeing - it's all good to me!
User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 14, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7266 times:

Quoting Par13del (Reply 8):
I say stock it up, allow the EU to give the launch aid publically, everyone know when and how much. Demand the right for the US govt and or its state govt. to offset if they so wish. Essentially this means nothing because the US does not operate like that, but I'm certain some creative lawyers and accoutants in the US could find a way to level the playing field. How about offering discounts to US airlines if they bought Boeing a/c and penalities if they bought govt subsidized airbus a/c?

Launch aid, which is essentially low risk capital funds beyond cash flow, is distorting the market by encouraging the launch of projects without adequate analysis of market size and the appeal of aircraft. I wonder if the A340NG and A380 would have been built if it weren't for launch aid and instead had to be funded through normal capital markets by commercial banks and investors who would require a solid business and understanding of the competition before shelling out money.

If governments continuously give dedicated funds for the purpose of designing new aircraft because the previous one failed to be competitive, no one is going to see a return on investment as the competition will be forced to respond by premature launch of new models. The danger is that these companies will end up being primarily in the business of designing new aircraft models rather than building aircraft. That is great for engineers who design planes, but does nothing to make a company a viable operating concern.

Tax breaks on the other hand don't distort the market like launch aid does, because the company has the choice of whether to invest in a new model, pay off debt, or return money to shareholders.

Quoting Trex8 (Reply 10):
even if the WTO rules against Airbus, the US are in no position to enforce anything given they don't abide themselves most of the time by WTO findings against the US.

The EU was the first to do so. If they continue to do so, then we can end the charade.

Quoting Lumberton (Reply 11):
A parallel situation that Canadian A.netters never tire of pointing out is the soft lumber issue where the WTO ruled in favor of Canadian exporters and the U.S. has not complied

WTO ruled in favor of the US recently. It's the NAFTA panel that ruled against the US. Anyway, the issue has been settled.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offline11Bravo From United States of America, joined Feb 2005, 1720 posts, RR: 10
Reply 15, posted (8 years 4 months 1 week 3 days 19 hours ago) and read 7253 times:

Quoting Lumberton (Reply 11):
A parallel situation that Canadian A.netters never tire of pointing out is the soft lumber issue where the WTO ruled in favor of Canadian exporters and the U.S. has not complied.

Actually that dispute was resolved earlier this year with the US paying back some $4 billion to Canadian companies:

http://www.safnet.org/archive/softwoodJune2006.pdf



WhaleJets Rule!
User currently offlinePar13del From Bahamas, joined Dec 2005, 7384 posts, RR: 8
Reply 16, posted (8 years 4 months 1 week 3 days 18 hours ago) and read 7235 times:

Lumberton, only way I see things like this getting sorted out is via people and economics. I mention the banana issue because in deference to my Eastern Caribbean cousin's, I believe the subsidies that they continue to receive from the EU keeps them tied to a crop which every hurricane season gets decimated. If they were not subsidized, we all know that they would have switched their economies a long time ago, especially in countries like St. Kitts.

If the US used its penalties assuming a US win to ensure that the US a/c industry only used Boeing a/c Airbus would be a big looser, more so than the US suppliers to airbus.

It's what so funny about the whole situation, US suppliers are hugh and very important to both airbus and boeing. I think American's are probably tired of the Europeans continually throwing in their face that they have the largest a/c manufacturer. Maybe if the US govt ensured that the playing field was always level when airbus was first set up this would not happen, but how could they not? They only started complaining when airbus started threating boeing position as number one, by then it was too late. If you don't complain at first don't start later.


User currently offlineHalls120 From , joined Dec 1969, posts, RR:
Reply 17, posted (8 years 4 months 1 week 3 days 18 hours ago) and read 7185 times:

Quoting Atmx2000 (Reply 14):
Launch aid, which is essentially low risk capital funds beyond cash flow, is distorting the market by encouraging the launch of projects without adequate analysis of market size and the appeal of aircraft. I wonder if the A340NG and A380 would have been built if it weren't for launch aid and instead had to be funded through normal capital markets by commercial banks and investors who would require a solid business and understanding of the competition before shelling out money.

Excellent question. One I'd like to hear a rebuttal on from our Airbus friends.


User currently offlinePar13del From Bahamas, joined Dec 2005, 7384 posts, RR: 8
Reply 18, posted (8 years 4 months 1 week 3 days 18 hours ago) and read 7157 times:

Jano I apologize, when I type US I meant the country not the airline, as we were discussing the subsidy issue from a country and company point of view. I have to remember this in future and use America or United States.

Sorry about the confusion.


User currently offlineHalls120 From , joined Dec 1969, posts, RR:
Reply 19, posted (8 years 4 months 1 week 3 days 18 hours ago) and read 7136 times:

Quoting Par13del (Reply 18):
Jano I apologize, when I type US I meant the country not the airline, as we were discussing the subsidy issue from a country and company point of view. I have to remember this in future and use America or United States.

Sorry about the confusion.

I thought that you might be referring to the country, not the airline, and I would also be interested in how many airbus aircraft have been bought by airlines based in the US. I would suspect that Airbus has sold more aircraft outside the US than inside the US....


User currently offline11Bravo From United States of America, joined Feb 2005, 1720 posts, RR: 10
Reply 20, posted (8 years 4 months 1 week 3 days 17 hours ago) and read 7098 times:

Quoting Halls120 (Reply 19):
I thought that you might be referring to the country, not the airline, and I would also be interested in how many airbus aircraft have been bought by airlines based in the US. I would suspect that Airbus has sold more aircraft outside the US than inside the US....

Top five Airbus narrow-body operators:
Air France 140
Northwest AL 139
US Airways 138
Air Canada 105
United AL 96

Top five A300/A310 operators:
Federal Express 107
UPS 50
American AL 34
Japan AL Domestic 24
Thai AW Int 21

Other Airbus wide-bodies:
Northwest AL 20 (8th)
US Airways 9 (28th)



WhaleJets Rule!
User currently offlineMham001 From United States of America, joined Feb 2005, 3682 posts, RR: 3
Reply 21, posted (8 years 4 months 1 week 3 days 17 hours ago) and read 7092 times:

What is infuriating about it all is this statement:

"As far as we can see, the negotiations have not led to anything," said Rainer Ohler, an Airbus spokesman. He stopped short of saying that Airbus would request the aid - which could run into billions of euros - but called the money "indispensable" for establishing what he called a level playing field with Boeing. "Launch aid is the only available system right now," he said.

Level playing field! What the hell is a level playing field to these people? Complete domination? And if they want to talk about taxpayer R&D, then they need to give back all the technology they got from NASA, starting with fly-by-wire,

Incredible.

[Edited 2006-06-19 04:22:42]

User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 22, posted (8 years 4 months 1 week 3 days 17 hours ago) and read 7034 times:

Must admit that I'm more amused than infuriated by the EU/EADS side's various pronouncements, Mham001. They seem to have no sense of the tactics being employed on the US/Boeing side.

"Peter Power, a spokesman for the EU trade commissioner, Peter Mandelson, said that Brussels would continue to make "every effort" to resolve the dispute by negotiation.

"We remain ready to put launch aid on the table if there is a commensurate offer on the U.S. side," Power said."


There is absolutely no need for the US side to make any 'offers.' Their objective is to stop the EU giving 'launch aid' to Airbus. While the matter remains 'sub judice' at the WTO, that objective is achieved. For the moment, the US side doesn't need to do anything more.

And this part of the report suggests that if launch aid is delayed much longer, there is a risk that EADS will go broke. Which (among other things) would solve Boeing's problems for good and all.  Smile:-

"Inside EADS and Airbus, executives said that financial pressures had made the need to request aid more pressing.

"For Airbus, launch aid is becoming topical again," one executive familiar with the company's financial situation said. "When the coffers are empty the pressure rises."



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineSpartanmjf From United States of America, joined Nov 2005, 506 posts, RR: 0
Reply 23, posted (8 years 4 months 1 week 3 days 17 hours ago) and read 6986 times:

What is becoming clearer and clearer is that, by avoiding private capital markets, Airbus does not wish to play on anything resembling a level playing field.

By avoiding these markets, by avoiding risk, and by utilizing government 'aid' which is in reality a direct subsidy, Airbus is able to sell aircraft at a price that is lower than it would be given a level playing field.

"We are willing, within logical limits, to give sufficient support to EADS to help it through these problems," Prime Minister Jos� Luis Rodriguez Zapatero of Spain said after a European Union summit meeting on Friday.

At the French Transport Ministry, a spokeswoman, Laurence Lasserre, said the self-imposed freeze could not be expected to last indefinitely. "This situation cannot last beyond a reasonable time span," she wrote in an e-mail.


This is infuriating, the presumption that state aid is a given. Let Airbus and EADS make the personnel and program cuts needed to reduce unneeded expenditures and make their business case to the world's private investors.



"Nuts to the man in 21D!"
User currently offlineAerospaceFan From , joined Dec 1969, posts, RR:
Reply 24, posted (8 years 4 months 1 week 3 days 17 hours ago) and read 6959 times:

I certainly hope that this dispute doesn't worsen relations between the U.S. and Europe. From a business standpoint, both continents need each other. As others have noted, there are many suppliers for Airbus products that are based in the Unied States, and there are important partners and subcontractors for Boeing products in Europe.

The introduction of intangibles, such as national pride, would inject something of an irrational factor into the operation of capital markets, and this is an issue that could retard the overall progress of the aviation industry.

I note that airlines in the U.S. did not hesitate to buy Airbus products, any more than European airlines, as far as I am aware, decided to support the "home team" over Boeing. I think that this historical approach has been overwhelmingly rational and beneficial. Rational economic actors provision their inventories according to what is likely to work to their own benefit, and not according to prejudice or whim.

Regarding the issue of launch aid, both Europe and the United States should realize that litigation over this issue has become something of a transactional cost that detracts from the benefits of healthy competition. If it is true that Europe has given launch aid in addition to the types of informal tax-break aid it accuses the hosts of Boeing plants of giving, and on top of cost-free government research by NASA and other public agencies, then surely in fairness no further instances of such aid should be provided.

NASA and ESA have freely shared much scientific information in the name of progress and the common benefit of mankind. NASA, in particular, has been historically open with the provision of the results of its aeronautical research, as far as I know. The concern military secrecy that surrounds projects such as the Joint Strike Fighter, as to which a controversy^1 developed with our British friends by reason of the withholding of high-level manufacturing data, is largely absent on the part of NASA. The question of whether benefits obtained by Boeing from government agencies constitutes a form of launch aid is essentially a wash, because such research is equally available to Boeing's competitors across the globe.

I believe that if the Airbus/EADS controversy at issue extends beyond its current scope, which appears likely if government launch aid is provided to the European consortiums, then relations between our respective continents will have taken a serious step backward. And this is something that benefits neither of us, temporary victories notwithstanding.

____________________________________
1. As I recall, this controversy has lately been resolved.

[Edited 2006-06-19 05:14:43]

25 GeorgiaAME : I'm not quite certain what this big kerfuffle is all about... Seems like standard operating procedures out of the EU. Private enterprise refuses to ba
26 DL021 : No more than Airbus gets when it builds a factory...look at the German wrangling for the A-380 assembly plant....'launch aid' is simply a no-risk loa
27 Douwd20 : What's amazing if this all plays out and Airbus is given state aid what is the point in reading the market correctly and developing the 777 and 787 an
28 N908AW : There is no point. This is the difference between Airbus and Boeing. The U.S. Government's "subsidies" aren't tax-deductible, or for those not subjec
29 Post contains links and images WingedMigrator : I was curious about the EU's complaint against Boeing. It turns out the WTO website is an excellent resource... you can download the text of the actua
30 Dhefty : Sorry, but according to Airbus' Orders Summary of May 31, 2006, narrow-body operators are ranked as follows: US Airways - 195 Northwest - 143 Air Fra
31 BlueFlyer : If for one think there might not be just one "losing" side but two. The WTO is as keenly aware as anyone else of the possible consequences a one-side
32 Atmx2000 : As has been noted before, Airbus has benefited from the published results of US government sponsored R&D activity. Then why isn't McDonnell Douglas s
33 Spartanmjf : Great - then let's put the kind of import tarrifs on government-subsidized aircraft that would raise their prices to market levels and have US, NW, a
34 BoomBoom : How do you know? Do you follow French and German politics that closely?
35 BlueFlyer : Skipping over the whole issues of how to set market prices when you have only one reference to judge by (or so I assume from your post), you seriousl
36 Post contains images WingedMigrator : Can of worms!!! Which is a great way of summing up the whole affair. Let me point out that government business is hardly a "distraction" for Boeing.
37 BlueFlyer : Actually, close enough, yes. Not that it is that hard to do. My point was merely that one shouldn't infere too much from Chirac & Co's presence at th
38 NAV20 : I don't think the rights and wrongs of the WTO case matter much. 'Bottom line', I reckon, is that without an injection of government cash in some form
39 Atmx2000 : At the current point in time yes. But that has not been the case historically, and government revenue will probably contract while commercial revenue
40 BlueFlyer : From the IHT article: However, a senior Airbus executive, speaking on condition of anonymity, stressed that any decision to ask for the loans would b
41 Dhefty : Oops, I forgot to include UAL at 152 in the number 2 spot just below US Airways. Four out of the top 5 are in North America!
42 Coa747 : NASA has historically shared information with anyone willing to listen. From Cockpit Resource Management to advanced aerodynamic projects. The US gove
43 Joni : No, that was Richard Aboulafia. WRT the launch-aid loans, they're standard practice and in-line with the 1992 bilateral agreement, and repayable unli
44 Parabolica : Absolutely. As I have said many times, this is why the aerospace battle is of such paramount importance on both sides of the Atlantic : it is a fight
45 AerospaceFan : I think you should probably specify which "cash gifts" these are, and why these "gifts" as they pertain to Boeing weren't also given, in effect, to A
46 Atmx2000 : What it does is create a direct legal obligation for EADS to provide accurate and complete information to the US on a silver platter. If they fail to
47 Post contains images Astuteman : Airbus aren't calling the loans a "Rescue Package" - Aboulaifa is When the parent company is STILL forecasting cE2.8Bn operating profit for 2006 and
48 Atmx2000 : It's not just low risk, but rather the on demand nature of a surge of money targeted to delivering a commercial product. If Boeing received the same
49 NAV20 : Couldn't agree more with 90% of what you say, Astuteman. Couple of additional points, though:- EADS tends to forecast profits on the most favourable b
50 Post contains images Astuteman : True. I did reserve my option though, just in case... Bear in mind also that profitability and liquidity aren't always the same thing It is quite con
51 Joni : I think we've had that discussion ten times too many already. I encourage you to consult the archives. This is a tongue-in-cheek flamebait and I've s
52 Astuteman : UK + France did (and still do) a little bit too.................... Regards
53 AerospaceFan : I might do that, but I would note that it was you who raised the issue. The existence of a nuclear umbrella is a matter of historical record. Now, wh
54 Joni : I didn't IMO "raise" the issue as much as refer to it in passing, and with implicit reference to the fact that it's been discussed to death already (
55 EbbUK : I love this reply. Airbus can do all of the above WITHOUT state aid, it would just cost a hell of a lot more sourcing loands from the money markets.
56 Post contains links AerospaceFan : It is, if you think that that research and development that arose in part because companies like Boeing received government contracts cannot be consi
57 EbbUK : We should all listen to Joni, he has got it right!
58 AerospaceFan : So why doesn't it? Assuming, hypothetically, that you're right that Boeing is taking subsidies, then why wouldn't Airbus want to take the high road,
59 EbbUK : the business of making money and the morality business are 2 very different disciplines. Airbus is very good at making money, that's where it should
60 AerospaceFan : Well, normally I would have no objection to any company's wanting to make money. However, Airbus has also created something of a mess of the A380's d
61 Post contains links and images NAV20 : Don't readily see how they can find the money, EbbUK, especially the big swag for BAE. EADS only made Euro516M. gross in the first quarter of this ye
62 AerospaceFan : I think that a receivership and wind-up for EADS and Airbus would be disastrous from the standpoint of European aviation manufacturing, unless the fo
63 Trex8 : but Airbus pay royalties to the governments which provided launch aid beyond the principal and interest from the original aid, the UK has received al
64 Halls120 : It means nothing if you intend to be blind to the reality that if President Bush appeared at the roll out of the 787, there would be dozens and dozen
65 NAV20 : I agree that it is not the most likely outcome, Trex8. It's more likely that the three governments involved (four counting Britain) will bail EADS ou
66 PVD757 : Joni - nice documnet(not!) Why don't I just start posting all of the dribble that Boeing puts out there and assume that their side is correct, no matt
67 Joni : By the way, certain American instances such as Boeing and the US government have already conceded that military r&d funding can constitute subsidies.
68 Post contains images Astuteman : Duty compels me to take issue with that statement PVD757- sorry. I guess the horrendously expensive things that I've worked on for the last 26 years
69 Joni : Are you high? If we look at the EU, the militaries of its member coutries are currently exceedingly powerful and capable of repelling (and indeed det
70 AerospaceFan : Correction of typo: Additionally, while I thank you for your reply, Joni, I would ask that you please point out a reputable reference for the followin
71 AerospaceFan : I think you are correct that Europe has very advanced militaries, but they are not as powerful as you seem to believe. In fact, Europe cannot defend
72 N844AA : It seems more than a little disingenous to claim that strategic deterrants don't provide any strategic benefit. Quite the contrary, I would think --
73 Joni : Sure, the following is from the 1992 bilateral agreement between the EU and US: Article 5 Indirect government support 5.1. Parties shall take such ac
74 Post contains images NorCal : The problem I have with launch aide is that it lowers the risk and gives the money up front to do projects. On the other hand Boeing has to spend mone
75 USAF336TFS : Joni, do you sincerely believe this statement? If so, I suggest you get yourself a subscription to any and all of Jane's Defense Reference materials.
76 Lumberton : Yes this is the main point and Astuteman pointed it out earlier. It confers a tremendous advantage to EADS. Edit: See Reply #47 for more info....[Edi
77 Longhaulheavy : I love how these threads degenerate into who has the capability to nuke the crap out of the other. I'll interject my opinion, but not on that topic. T
78 StuckInCA : I think you're arguing against the point you made earlier in the thread. Based on this statement, US military statement gains little in terms of tech
79 BlueFlyer : I never insinuated there was no difference in the risk assumed by both companies. My point was, and remains that Airbus doesn't benefit from blind su
80 Coa747 : The United States is a leader in technology far over our European friends. The German government in particular have been very concerned over the gap i
81 Atmx2000 : Let's not pretend that the US defended Europe because of the market possibilities. They defended Europe because the US was dragged into two world war
82 Kellmark : It is always amazing to me when Europeans moan about Boeing while they remain prepared to do anything for EADS/Airbus. Remember the A400M engine compe
83 DAYflyer : "launch Aid" = rescue package? I am surprised that anyone in Airbus would admit such a thing. Looks like the Boeing pundits were right after all about
84 Post contains images EbbUK : I bloody hope I will be right otherwise we are doomed
85 Post contains images Baroque : Oh my ears and whiskers. It aint aid, or aide, it aint a gift, it is for the launch of a project and it is above all repayable. Joni was the first to
86 Post contains links and images Halibut : Joni, Thanks for enlightening my day ! You never cease to amaze me ! We don't know the half of what the US/military knows in terms of technology ! Ho
87 Post contains links Halibut : Why don't you throw that one passed Tony Blair ! http://www.nationalreview.com/kudlow/kudlow200603251037.asp Halibut
88 AerospaceFan : Joni, thank you for providing the excerpt from the 1992 agreement. It is very helpful, and it serves as another reference point for discussions concer
89 Halls120 : I never suggested they benefit from "blind" support. Quite the contrary, it is quite visible support, and it is support they can count on going into
90 Post contains images Glideslope : You are completely out of touch with reality on this subject. Sorry.
91 F14ATomcat : Here is the litmus test on the over enlarged use of the word subsidies. If Boeing were bomb with the 787 etc. they could conceivably go bankrupt. With
92 Post contains links and images Lumberton : Baroque, I'm not questioning the fact that there is an element of risk whenever one takes a loan, both for borrower and lender. However, I think the
93 SuseJ772 : It almost seems pointless with this long of a thread, but nevertheless, I am totally in agreement with you (Maybe it is something with us Georgians).
94 Aither : I disagree. There are a lot of differences based on a lot of preconceived ideas from the US about business in Europe. Free entrepreneurship, open mar
95 Post contains images AvObserver : Thanks for supplying information from a thoroughly impartial source. How the hell could EADS accurately determine such a sum, anyway? Even the U.S. O
96 NAV20 : No disagreement, Baroque, exceot that I would say, "...they have taken on the responsibility to repay it IN THE END." As I understand it, EADS' liabi
97 Baroque : Couple of problems here. There is an approval process. You could argue it must be purely formal as all apps seem to have been approved. Alternatively
98 Joni : Some brave soul on A.net (I forget who) went to the extraordinary length of finding out if this was the case (as vigurously repeated on this board) a
99 Post contains images NAV20 : Joni, my 'natural inclination' is to state the facts as far I know them in all cases. However, although the legal position is quite clear (any outsta
100 EbbUK : Yeah we can stomach that. For continued prestige in the world market. Pretty small chips. If BAE forced a payout that would force EADS to file for ba
101 Baroque : I should have replied to this. That seems to be true. But it is also pretty unlikely. So that the first time I read it, I sort of skipped it. Then I
102 Joni : I'm trying to figure out, if these two statements are compatible. I suppose it's a fine balance. I suspect the culprit was just laziness, and of cour
103 Baroque : It is tempting to take the laziness option, but I am not sure it squares with the reams of information that is available that does not quite tell you
104 Post contains images NAV20 : Baroque, haven't got the stamina to plough through EADS' accounts again, but the total outstanding in those is something over E5.0B. One has to assum
105 Baroque : It can be a tough contest! You are appealing to my better nature to go do it again. But with EADS accounts, I have no better nature! I confess I was
106 NAV20 : Not so in the aviation industry, Baroque mate - up to half of your '17 years' are occupied by developing, designing, and building the aircraft. As Ai
107 Post contains images MrMcCoy : In the end, competition is good for everyone. Airbus forced Boeing to built a higher quality product, and the result of that is causing grief for Airb
108 AirFRNT : So does Airbus exist to make money, or is it prestige thing? Look at the A380 and it's sales record to find out.
109 MrMcCoy : Sorry mate, that was just about the funniest thing I've read all day. One hopes Airbus is actually pulling cash, but the super-successful A320 progra
110 NAV20 : Why, EbbUK? BAE wants its money out so it can invest it in their more profitable core defence business, and also expand their interests in the USA. W
111 EbbUK : Well let's see, BAE go to another company and say hey we want to do business with you, we just bankrupt our other partner when we changed our minds.
112 EbbUK : I had a wee laugh too
113 Post contains links NAV20 : This New York Times article seems to confirm that a government bailout is being actively discussed. And - surprise, surprise - the 'price' of the resc
114 Post contains images Lumberton : Can this be possible? Will the Germans stand for this? Even though Boeing's stock is near it's highs, perhaps its time to buy even more?
115 Baroque : I have no idea what the Germans (or French come to that) are planning, but I think the odds are that it is not what Nav20 suggests. It is quite stran
116 Lumberton : Short Boeing; long EADS?
117 NAV20 : Pretty significant that the finance minister is involved, Baroque. "Mr. de Villepin's finance minister, Thierry Breton, told lawmakers that he had me
118 Post contains images USAF336TFS : And would pretty much gift wrap the USAF Tanker Replacement contract for Boeing.
119 Post contains images Halls120 : No way in he** Congress approves a KC-30 if the government of France increases its ownership of EADS, and takes more active control of the company...
120 Baroque : Stranger things have happened. As they say, time will tell. The Finance minister could be used as an argument for a range of possibilities, or even j
121 Post contains images NAV20 : Baroque, I meant that the finance minister being involved suggests that they are planning to put money in, and presumably take control, not just press
122 Baroque : I WILL put money on you being correct in that! The whole EU thing is very difficult. Getting votes to support it is much like getting votes to change
123 Post contains images Boeing nut : I'm not touching this one with a forklift.
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