|Quoting Cfalk (Reply 21):|
But the US government (nor any other government) is not about to loan Boeing billions of dollars at rock-bottom rates and say, "If the project flops, that's OK, you don't need to pay us back." That's what gets up people's noses.
1) Government rates, and government rates+1% are not rock-bottom rates. By using launch aid, Airbus actually incurs two penalities. Firstly, they pay a PREMIUM over market rates. Secondly, they have to continue paying royalties, which basically means they an additional penalty payment for taking launch aid. In return for that rate premium and royalty penalty, they get a reduced risk. Airbus makes a simple business decision.
This is market economics at it's best: Do we take cheap market money and have higher risk, or do we take more expensive government money, but decrease the risk?
2) With the exception of the A380 and the A345/6 programs, which are relatively young, ongoing programs, EVERY Airbus program has reached the point of repayment of government loans to the best of my understanding and they are liable for the loans on those programs, at the premium rates AND
the ongoing royalties.
Now granted, the A345/6 breakeven is basically not going to happen, and neither is the A380 (by the way breakeven at current selling prices is just shy of 800, by my quick calculation). These will be the first programs funded by launch aid that do not reach repayment in the 17 year period.
So, I guess it depends on your point of view. Now, unlike the US, Europe does not have that non-market system called Chapter 11, so If there wasn't launch aid, the A380 would probably have sunk Airbus, and we'd be left with only Boeing, meaning incredibly pricey 787's for AA
, and no 748i.
In my opinion,
- Airbus is purchasing the reduced risk (Boeing can probably do the same from private sources, if they wanted), and deserves it
- Is funding it with EU taxpayer money, which so far has turned out to be a pretty good investment for EU taxpayers, and much more lucrative than pouring it into, say, farming subsidies
- It provides a protection mechanism for Airbus similar to Chapter 11, which enables them, like Boeing, to take big bets
I know there are many, many of my fellow countrymen that would dearly love to see Airbus bankrupt - and quite a few of them have already posted to this thread. I'm not going to join those.