Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
n1786b
Topic Author
Posts: 385
Joined: Tue Sep 27, 2005 6:10 am

UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 6:19 am

From the Times:

SNIP

The Government is putting pressure on British Airways, the national flag carrier, to buy Airbus aircraft and Rolls-Royce engines to protect jobs in this country.... Government ministers and officials are understood to be urging Willie Walsh, chief executive of BA, to “buy British” by supporting Rolls and Airbus, both of which have large manufacturing operations in the UK.
....

Last night a BA spokesman denied that the Government was putting pressure on the company over the fleet renewal programme. He said that no government representations had been made.

This was rejected by a source close to the negotiations. He said: “This is something the Government is concerned about and taking an active interest in.”

SNIP

The rest is online here:

http://business.timesonline.co.uk/to...ctors/transport/article2434515.ece

So much for the "They will buy what they feel is best for their business."

- n1786b
 
WAH64D
Posts: 744
Joined: Tue Jan 11, 2005 4:14 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 6:57 am

"A source close to the negotiations", yeah very good. To be honest this reeks of tabloidistic reporting. Its been said by others but the times is really heading downhill these days.

Quoting N1786b (Thread starter):
So much for the "They will buy what they feel is best for their business."

The government can take all the interest it wants and BA will still buy from the company offering the best overall package BA's needs. It really is that simple. The UK public has long been able to look beyond blind patriotism. There is more than one way to secure a healthy economy, one is undoubtedly to secure manufacturing jobs, a short term solution. Another is to leave your major companies to buy the products that will allow them to remain competitive for years to come, regardless of where that product is manufactured. This IMO is more conducive to a healthy economy.
I AM the No-spotalotacus.
 
art
Posts: 4076
Joined: Tue Feb 08, 2005 11:46 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 7:15 am

Quoting N1786b (Thread starter):
So much for the "They will buy what they feel is best for their business."

"As a publicly owned company, BA is under no obligation to consider national interest when buying new aircraft. However, the aviation sector is heavily regulated and BA’s future growth will depend on government support for new infrastructure such as additional runways at Heathrow, Stansted and Gatwick."

Let's suppose the above para from the timesonline article is accurate in intimating that the UK govt would be less inclined to support improvements to London's main airports if BA did not buy RR Airbus a/c. What BA might consider to be in its best interests: buying Airbus rather than Boeing ie buying what they feel is best for their business.

Personally I would not see the sense in the UK govt refusing support to projects that would benefit the UK economy as a whole in order to "punish" BA for buying US rather than UK/European product.
 
User avatar
OA260
Posts: 25356
Joined: Thu Nov 30, 2006 8:50 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 7:18 am

I'm sure there is pressure on them behind closed doors but BA should still decide what is best for them from a commercial point of view. I would love to see them order Airbus but only if it suits them .
 
User avatar
keesje
Posts: 14283
Joined: Thu Apr 12, 2001 2:08 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 7:19 am

from the article:

As a publicly owned company, BA is under no obligation to consider national interest when buying new aircraft. However, the aviation sector is heavily regulated and BA’s future growth will depend on government support for new infrastructure such as additional runways at Heathrow, Stansted and Gatwick.

This is aviation. The links to environments, landing rights, economic infratsructures, safety authorities, airport infrastructures, strategic / militairy interest, export licenses, R&D funding, export guarantees ..

all make that governments play a major role in aviation on all continents, whether it fits our free market mantras or not.
"Never mistake motion for action." Ernest Hemingway
 
Iloveboeing
Posts: 476
Joined: Mon Oct 31, 2005 11:02 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 7:26 am

This is so ridiculous! I mean, I understand the British government's point, but BA should buy the aircraft that is best for them, whether it be Airbus or Boeing. I, of course, am rooting for Boeing though!
 
egnr
Posts: 420
Joined: Sat Feb 07, 2004 8:31 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 7:32 am

It is only natural that representatives of the UK govt (and other UK political parties) are urging BA to buy Airbus and RR engines - there is talk of an election being called fairly soon in the UK (before the global credit crunch really hits home to make it more likely that the current government is re-elected), and the local leaders of the constituencies where people are employed on Airbus or RR programs want to appeal to the masses. But it does not mean that BA will purchase Airbus aircraft and RR engines - witness the early GE powered 772s purchased instead of RR-powered A330s.

Similar levels of pressure have been placed on the Royal Navy for example to persuade them to have their vessels built in the UK, rather than abroad. But, the vessels have still been built abroad.

If BA do order Airbus aircraft, it will be because those are the aircraft that best fit in with the airlines requirements - ultimately profitability and returns for shareholders. For years, BA and Boeing were very closely linked, with BA often being referred to as 'Boeing Airways'. The A320 family order was a surprise when it happened, but this deal was done on price, aircraft capability, delivery availability - not on political pressure.

If an Airbus/RR order is placed (Airbus more-so than Rolls Royce), I fully expect a lot of posts on here saying how BA was pressured by the UK govt into such a deal, rather than congratulations to Airbus and RR. Whereas if the order goes to Boeing/GE, the posts will be more congratulatory and singing the praises of BA choosing the 'better aircraft for its needs' instead of 'bowing down to political pressure'.

Out of interest, what could the UK government do to 'punish' publicly-owned BA if it placed orders with Boeing & GE instead of Airbus & RR? Would it apply pressure to publicly-owned BAA to be less 'generous' with slot allocations at Heathrow? Would a publicly-owned company submit to political pressure at the expense of profits and dividends to shareholders? Would the British Government (and British Royal Family) stop hiring an American-made Boeing 777 from British Airways for official visits?
7late7, A3latey, Sukhoi Superlate... what's going on?
 
WAH64D
Posts: 744
Joined: Tue Jan 11, 2005 4:14 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 7:33 am

Whichever way you cut this, any Airbus widebody order from BA will be largely heralded on A.net as one of two things:

1. As a politically motivated concession
2. As an order made on aircraft priced "below cost" .

Heaven forbid that people are able to think for themselves and realise that orders are made for one reason and one reason only, to generate the maximum possible profit for the airline. BA will do just this, order the best aircraft for their needs. Even if one company is offering a similar aircraft at a cheaper price, this is a very small consideration. BA operate their aircraft for long enough that the most efficient aircraft will always work out to be the more profitable of the two over their lifetime. For this reason, an Airbus widebody ordered by BA, is the best aircraft for their needs, no more and no less. Some people may have a hard time accepting this.
I AM the No-spotalotacus.
 
User avatar
Stitch
Posts: 27542
Joined: Wed Jul 06, 2005 4:26 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 8:03 am

Buying 787's with RR engines would help British jobs since the main landing gear comes from Gloucester.  Smile
 
User avatar
Devilfish
Posts: 7377
Joined: Tue Jan 24, 2006 7:52 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 9:43 am

Quoting EGNR (Reply 6):
Would the British Government (and British Royal Family) stop hiring an American-made Boeing 777 from British Airways for official visits?

Yes. They would buy RR powered 787s for Brown Force 1 and the Queen's Flight instead.  Wink  duck 
"Everyone is entitled to my opinion." - Garfield
 
cygnuschicago
Posts: 518
Joined: Wed Mar 21, 2007 3:34 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 9:45 am

Quoting N1786b (Thread starter):
So much for the "They will buy what they feel is best for their business."

Well, the French government pressured AF to buy Airbus, and they still went for the 777. Similarly, I expect BA to make a business decision, not a political decision.

Now, looking at the context: Frankly, there is nothing wrong with the government encouraging a certain behavior. Consider that through launch aid the UK government has a nice fat stake in the A330/340/380 programs and possibly the A350. This investment in Airbus provides the UK government with a nice royalty payment stream. Like any other stakeholder, the UK government stands to profit from Airbus sales. Thus, just like a Boeing shareholder roots for Boeing, so the UK government will root for Airbus.
If you cannot do the math, your opinion means squat!
 
Byrdluvs747
Posts: 2552
Joined: Thu Jul 15, 2004 5:25 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 10:09 am

So maybe the US govt should put pressure on US carriers to buy only Boeing. Can you imagine the whining that would come from Europe?
The 747: The hands who designed it were guided by god.
 
AirNZ
Posts: 544
Joined: Fri Feb 11, 2005 6:03 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 10:19 am

Quoting Byrdluvs747 (Reply 11):
So maybe the US govt should put pressure on US carriers to buy only Boeing. Can you imagine the whining that would come from Europe?

Are you honestly telling me they don't......or do they only do it with the likes of Israel?
Of course, we never hear any whining from the US do we (except for everything under the sun being the usual 'unfair competition', of course)?
Flown:F27/TU134/Viscount/Trident/BAC111/727/737/747/757/767/777/300/310/320/321/330/340/DC9/DC10/Dash8/Shorts330/BAe146
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 10:33 am

Quoting EGNR (Reply 6):
Similar levels of pressure have been placed on the Royal Navy for example to persuade them to have their vessels built in the UK, rather than abroad. But, the vessels have still been built abroad.

The Royal Navy is a government institution. They buy at the discretion of the government who pays their bills.

Quoting EGNR (Reply 6):
The A320 family order was a surprise when it happened, but this deal was done on price, aircraft capability, delivery availability - not on political pressure.

Actually, I believe Blair heavily lobbied BA to buy A320s. The nature of his statements during the official announcement ceremony are suggestive of someone who has too much invested in BA buying Airbus.

http://www.iht.com/articles/1998/08/26/ba.t_2.php

"We look forward to the day when Airbus is the number one producer of civil aircraft in the world," he said. Mr. Blair also linked the Airbus purchase to prospects for a combined European effort to build combat aircraft, an industry where British Aerospace seeks to play a leading role

...

Underscoring its political dimensions, the British deal was announced Tuesday at Airbus headquarters in Toulouse, France, in a ceremony given unusual salience by the presence of Mr. Blair.

Mr. Blair linked Airbus's "strategic vision" to improving prospects for European cooperation in defense industries, especially combat aircraft. British Aerospace, Europe's strongest manufacturer in this area, has been discussing cross-border mergers with German and French companies, and its hand could be strengthened by signs of a new British commitment to European industrial unity.


...

The way for the reorganization was cleared last month when Prime Minister Lionel Jospin, in a potentially controversial step, announced the privatization of Aerospatiale, France's partner in Airbus, to meet British and German demands.

His political investment was "repaid" by Britain's decision to buy Airbus airliners, the daily Le Monde said, citing the sale as evidence of a new British commitment to a European aerospace industry.


Now according to the article BA got a good deal, but who knows where that money in the end really came from.

Regardless, this continues a pattern of the British government using BA as a means to further the interests of its aviation manufacturing industry. They used BA to ensure RR's participation on the 757, though then as now BA claims they got what they wanted.

Quoting CygnusChicago (Reply 10):
Well, the French government pressured AF to buy Airbus, and they still went for the 777. Similarly, I expect BA to make a business decision, not a political decision.

For whatever reason, the executives who ran AF had a backbone and stood up to huge amount of pressure from French politicians. Of course, if AF had succumbed, I think you would have seen decreased access to the US market for Airbus arranged for by US politicians, especially as the degree of pressure applied became public knowledge.

Quoting CygnusChicago (Reply 10):
Now, looking at the context: Frankly, there is nothing wrong with the government encouraging a certain behavior. Consider that through launch aid the UK government has a nice fat stake in the A330/340/380 programs and possibly the A350. This investment in Airbus provides the UK government with a nice royalty payment stream. Like any other stakeholder, the UK government stands to profit from Airbus sales. Thus, just like a Boeing shareholder roots for Boeing, so the UK government will root for Airbus.

Any government benefits from the activities of a company and its employees as they pay taxes. Therefore one might expect the US government to lobby US airlines to buy Boeing as it ands its employers pay a lot of taxes. You don't see that happening.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 10:41 am

Quoting AirNZ (Reply 12):
Are you honestly telling me they don't......or do they only do it with the likes of Israel?

Pretty much yes. There is no mechanism for the US government to penalize US airlines who would do otherwise, and given Boeing's operations are concentrated in a small number of states, there simply is enough reason for the majority of US pols to push an airline to buy Boeing. Moreover, before the MD takeover, there was more than one commercial supplier and it would be foolish for the federal government to get involved in lobbying airlines to buy from one particular manufacturer lest they offend the electorate from the states with operations of the other manufacturer(s).
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
trex8
Posts: 5671
Joined: Sat Nov 02, 2002 9:04 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 10:55 am

Quoting Atmx2000 (Reply 14):
There is no mechanism for the US government to penalize US airlines who would do otherwise,

nothing directly but there are tax breaks, post 9/11 type bailouts, infrastructure projects, various "taxes and tariffs and fare surcharges" etc which depend on political largesse which may be lacking if US carriers consistently bought "foreign"
 
ikramerica
Posts: 15135
Joined: Mon May 23, 2005 9:33 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 10:58 am

People dismiss me when I say that there is heavy pressure on AF, LH and BA to buy Airbus, and more so on the smaller airlines. While AF, LH and BA are large enough to fight off some of that pressure, smaller EU airlines aren't, and they are by and large buying Airbus because of it. The bigger carriers all switched to A320 series for narrowbodies, and LH also went entirely Airbus until the 748i order. And I highly doubt that AF will go Boeing in the future as the A350 comes available.

One can say that "they are the best planes for them" but that doesn't hold water when scrutinized. Not because Airbus aren't good planes, but because the result here would imply that while to the rest of the world Boeing and Airbus have competitive products, for some weird reason, in the EU, Airbus products are superior for the smaller carriers as they routinely win out (unlike in the USA, where in the last 15 years, the battle has not gone exclusively to Boeing). The logic doesn't hold unless there are strong government influences involved.

I expect there is strong pressure on BA to buy Airbus. This is likely especially true on the A380 vs. 748i, because the A380 can be had with RR engines and British wings, while the 748i can only have GE engines and little of the plane is produced in the UK. Further, the A380 program needs a boost, and my guess is the reason you have seen BA make such an about face re: the A380 is this pressure. Walsh has already agreed to buy 12-15 of them to placate the government. Not to say they can't use them, but BA doesn't "need" the A380 given their LHR position.

But expect a 787 and A380 order from BA this time if this pressure is truly as advertised. 787's with RR, A380 with RR. In the future BA may also buy the 748i as the A380 can't replace all of their 744s, but I think the pressure is too great on them to buy the A380 now, not later, especially as VS seems to have soured on Airbus.

And BTW, I am sure there is lobbying going on in the USA too re: buying Boeing jets, mainly from the governors of the states that build the parts and planes, and less so from the federal government (since it is so pro-outsourcing right now). But that pressure doesn't seem to be that effective, because US just added more A320 series despite the order being large enough to go either way, and VX started up with A319s, as did Skybus, and for the latter two, municipalities are going out of their way to accommodate the new airlines. If the pressure were really strong, the local support would have been somehow tied to buying "American."
Of all the things to worry about... the Wookie has no pants.
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 11:00 am

Quoting Atmx2000 (Reply 13):
but who knows where that money in the end really came from

We might assume that BA's auditors do and that any shareholder or analyst with time on their hands could soon find out. We might also assume that if BA somehow got a subsidy then Michael Bishop and Richard Branson would have raised a huge and very public stink!

Quoting Atmx2000 (Reply 13):
They used BA to ensure RR's participation on the 757

I guess so, but you have go back almost thirty years for that example. Back then BA was state-owned and the UK government was far more interventionist than it is now.

Quoting Atmx2000 (Reply 13):
though then as now BA claims they got what they wanted

I'm sure they did. They got the 757 (an excellent plane) with what became by far the most popular and reliable engine option.

Quoting Atmx2000 (Reply 13):
one might expect the US government to lobby US airlines to buy Boeing as it ands its employers pay a lot of taxes. You don't see that happening.

Maybe they are too busy leaning on foreign airlines and governments to buy Boeong...  duck 

As for the core question here, I have long been in the camp of those who deny that political pressure plays a part in the business decisions of BA, LH and others and I see no reason to change my mind. But I have no difficulty at all in accepting that Downing Street would prefer an Airbus/RR order over a Boeing/GE one. It would be very odd if it were otherwise.

Quoting CygnusChicago (Reply 10):
Frankly, there is nothing wrong with the government encouraging a certain behavior.

 checkmark  Dead right.

But the issue becomes one of nuance.

If the government is leaning heavily on BA and implicitly or explicitly threatening them, then that's one thing. But, I have to say, I doubt very much if that's the case.

However, if BA have politely enquired what the government's preference might be and/or if the Department of Trade and Industry (is that what it's still called?!) have sent BA an e-mail expressing the hope that BA will "support British industry by buying..." blah, blah, blah, then that is something else.

If a journalist asks an appropriate government department what they'd like to see BA do and they say "Buy Airbus and RR", does that add up to "putting pressure" on BA? I suppose it does. But it seems like fairly mild pressure to me.
 
kaitak
Posts: 10061
Joined: Wed Aug 18, 1999 5:49 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 11:28 am

I can only guess that Boeing is not too pleased with this; remember that the airline has recently said that the A350 and 787 are in two different classes, so if there is political pressure applied, it would probably favour the A380 over the 747-8I, rather than the A350 over the 787.

Of course, BA is not compelled to follow govt advice and one should probably not read too much into the govt's persuasion. After all, although the proposed infrastructural changes - such as R3 at Heathrow - are strongly sought by BA, not to pursue them just because BA bought Boeing instead of Airbus would smack of "cutting off one's nose to spite one's face", since aviation infrastructure contributes significantly to UK economic growth.
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 11:28 am

Quoting Ikramerica (Reply 16):
and more so on the smaller airlines.

Rubbish. Please identify which "smaller airlines" have been pressured into buying Airbuses when they really wanted Boeings?

Quoting Ikramerica (Reply 16):
and LH also went entirely Airbus until the 748i order

Whereas BA and AF didn't. So what?

Quoting Ikramerica (Reply 16):
I highly doubt that AF will go Boeing in the future as the A350 comes available.

Why? Why would they buy the A350 over the 787 when they didn't buy the A340 over the 777?

There isn't even internal consistency in your (weak) argument:

Quoting Ikramerica (Reply 16):
AF, LH and BA are large enough to fight off some of that pressure



Quoting Ikramerica (Reply 16):
LH also went entirely Airbus



Quoting Ikramerica (Reply 16):
I highly doubt that AF will go Boeing in the future

Believe what approximation of reality suits your own agenda but you'll have to try harder than the above for your spin to have any kind of credibility.  Yeah sure

Quoting Ikramerica (Reply 16):
Walsh has already agreed to buy 12-15 of them to placate the government.

"to placate the government" An outrageous allegation for which you have not a shred of evidence.

Quoting Ikramerica (Reply 16):
BA doesn't "need" the A380 given their LHR position

Oh please...
 
TeamAmerica
Posts: 1540
Joined: Thu Sep 07, 2006 3:38 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 11:39 am

Quoting AirNZ (Reply 12):
Of course, we never hear any whining from the US do we (except for everything under the sun being the usual 'unfair competition', of course)?

No. Never. Read the WTO filings and you'll see no whining from either side, about any issue. Miraculous! spin 

Quoting Trex8 (Reply 15):
nothing directly but there are tax breaks, post 9/11 type bailouts, infrastructure projects, various "taxes and tariffs and fare surcharges" etc which depend on political largesse which may be lacking if US carriers consistently bought "foreign"

None of these things you cite are related to aircraft purchases - they are all about JOBS in the airline industry. Note that the post-9/11 aid was offered to all airlines...including US and NW - both Airbus buyers.

Quoting PM (Reply 17):
If a journalist asks an appropriate government department what they'd like to see BA do and they say "Buy Airbus and RR", does that add up to "putting pressure" on BA? I suppose it does. But it seems like fairly mild pressure to me.

Agreed. Nothing unusual about it either. US Senators from Washington State are not afraid to speak up for Boeing - but such words have much more effect on their constituency than they do on any airline's purchasing decisions. They're politicians, and we could say they are just doing their job...such as it is. smile 
Failure is not an option; it's an outcome.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 12:19 pm

Quoting Trex8 (Reply 15):
nothing directly but there are tax breaks, post 9/11 type bailouts, infrastructure projects, various "taxes and tariffs and fare surcharges" etc which depend on political largesse which may be lacking if US carriers consistently bought "foreign"

Have you considered the illogic of that statement? None of that "political largesse" has ever been contigent on what airlines have purchased. I would note the biggest beneficiary of post 9/11 bailouts is the legacy airline going all Airbus.

Quoting Ikramerica (Reply 16):
And BTW, I am sure there is lobbying going on in the USA too re: buying Boeing jets, mainly from the governors of the states that build the parts and planes, and less so from the federal government (since it is so pro-outsourcing right now). But that pressure doesn't seem to be that effective, because US just added more A320 series despite the order being large enough to go either way, and VX started up with A319s, as did Skybus, and for the latter two, municipalities are going out of their way to accommodate the new airlines. If the pressure were really strong, the local support would have been somehow tied to buying "American."

Most of those parts companies sell to Airbus, so few state politicians have any interest in lobbying for Boeing. Truly, only Washington and to a lesser extent Kansas has a vested interest in Boeing's commercial operations. That might be changing somewhat with outsourcing of major parts to Vought operations in Texas and SC. Nonetheless, Boeing and particularly its unions (just like the Big Three and their unions) have been rather short sighted in their desire to keep production localized to certain states or regions.

Quoting PM (Reply 17):
We might assume that BA's auditors do and that any shareholder or analyst with time on their hands could soon find out. We might also assume that if BA somehow got a subsidy then Michael Bishop and Richard Branson would have raised a huge and very public stink!

I never said the subsidy was provided to BA. In fact given BA got low pricing, I was thinking more alongs the lines of subsidizing Airbus or BAe to facilitate Blair's grand plans regarding Britain gaining a stake in the European aerospace industry. The goal would be to secure the UK's share of Airbus and

Quoting PM (Reply 17):
I guess so, but you have go back almost thirty years for that example. Back then BA was state-owned and the UK government was far more interventionist than it is now.

The UK government still subsidizes RR's commercial operations and it raised a small stink regarding BAe selling its Airbus stake, at least until BAe apparently explained its reasoning and Airbus's problems became apparent.

Quoting PM (Reply 17):
Maybe they are too busy leaning on foreign airlines and governments to buy Boeong...   

I would note that lobbying foreign governments is not what is considered a protectionist, as it does not involve controlling the behavior of domestic consumers. Doing the latter is a recipe for reciprocral actions leading to a trade war involving cutting off market access.

Quoting PM (Reply 17):
As for the core question here, I have long been in the camp of those who deny that political pressure plays a part in the business decisions of BA, LH and others and I see no reason to change my mind. But I have no difficulty at all in accepting that Downing Street would prefer an Airbus/RR order over a Boeing/GE one. It would be very odd if it were otherwise.



Quoting PM (Reply 17):
But the issue becomes one of nuance.

If the government is leaning heavily on BA and implicitly or explicitly threatening them, then that's one thing. But, I have to say, I doubt very much if that's the case.

Well, they would have to offer some inducement. Threats can be publicized and can cause problems for those issuing them, both domestically and internationally.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 12:21 pm

Quoting Atmx2000 (Reply 21):
The UK government still subsidizes RR's commercial operations

 wideeyed  Really?! How, exactly?
 
JTR
Posts: 77
Joined: Tue Jun 19, 2007 3:45 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 12:38 pm

Frankly, I think all of us here would be disappointed if our respective National Governments did not forcefully advocate for our national (or super-national) aerospace champion.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 1:12 pm

Other possible reasons for BA's A320 order:

http://findarticles.com/p/articles/m...4158/is_19980826/ai_n14181694/pg_1
BA builds bridges with Brussels
Independent, The (London), Aug 26, 1998 by Terry Macalister

THE DECISION by British Airways to break its commitment to Boeing and place its first-ever contract with Airbus Industrie has left sceptics wondering whether there was a political fix.

BA chief executive Bob Ayling strongly rejected this last night. He said: "The only thing that concerned us was getting the cheapest aircraft we could. If you buy for political reasons, you go bust."

The appearance of Tony Blair, Prime Minister, at the signing ceremony in Toulouse only fuelled this speculation yesterday. The official line was that Mr Blair happened to be on holiday in France and just wanted to join in the celebration.


...

BA also needs to rebuild some bridges in Brussels. The European transport commission has criticised BA for the dismissive way it supposedly treated regulators over its proposed alliance with American Airlines. The EC has given the formal go-ahead to the tie- up, but attached tough conditions which Mr Ayling says are too harsh.

The BA boss denied yesterday he was currying favour with the EC by placing the order with Airbus. "Life is not that simple," he insisted.

But the Airbus contract - helping to secure the future of 130,000 jobs at Airbus and its suppliers around Europe - should certainly help BA relations with the Commission.

One leading industry analyst said: "I am sure there was an element of politics in this. The fact that Tony Blair was at Airbus on the day certainly suggests this."

The coincidence that the Airbus contract was announced alongside a smaller deal for 16 Boeing 777 aircraft (with options on a further 16) also seemed to indicate a political eye was being kept on the US.

Up until now, Boeing has enjoyed a stranglehold on BA new orders. The decision to announce a smaller contract with the Seattle-based aircraft manufacturer looked like a face-saving device to many industry experts. The US is one of BA's vital markets.


[Edited 2007-09-12 06:43:35]
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 1:19 pm

Quoting PM (Reply 22):
   Really?! How, exactly?

They provide launch aid for RR engines. Trex8 has repeatedly noted the oddity that the US does not target such UK aid to RR.

Quoting JTR (Reply 23):
Frankly, I think all of us here would be disappointed if our respective National Governments did not forcefully advocate for our national (or super-national) aerospace champion.

We expect our government to advocate for our manufacturers when dealing with foreign governments that control or influence the purchasing decisions of their airlines because we don't believe in unilateral surrender to other foreign governments who would also lobby that foreign government. But we expect within the context of our own free market economy the government should butt out and let private companies make their decisions. However, if a foreign country influences its airlines to buy aircraft produced in that country, that country should not expect access to our market.

[Edited 2007-09-12 06:26:00]
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 1:29 pm

Quoting Atmx2000 (Reply 25):
They provide launch aid for RR engines.

Is that a "subsidy"?

Quoting Atmx2000 (Reply 25):
because we don't believe in unilateral surrender

Or, as we like to call it, "free trade".  duck 
 
silentbob
Posts: 1629
Joined: Tue Aug 15, 2006 1:26 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 1:30 pm

Quoting Ikramerica (Reply 16):
I expect there is strong pressure on BA to buy Airbus. This is likely especially true on the A380 vs. 748i, because the A380 can be had with RR engines and British wings, while the 748i can only have GE engines and little of the plane is produced in the UK. Further, the A380 program needs a boost, and my guess is the reason you have seen BA make such an about face re: the A380 is this pressure. Walsh has already agreed to buy 12-15 of them to placate the government. Not to say they can't use them, but BA doesn't "need" the A380 given their LHR position.

You left out the part about the governments not getting their launch aid back if the A380 program doesn't break even.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 1:41 pm

Quoting PM (Reply 26):
Or, as we like to call it, "free trade".   

If it were free trade, the foreign government wouldn't be meddling in the decisions of its airlines for its advantage to begin with. There are situations where the foreign government will restrict its meddling to its state-owned carrier and let the private carriers do what they want. In that case intergovernment lobbying would be restricted to the state-owned carrier.

Quoting PM (Reply 26):
Is that a "subsidy"?

Well it is the same thing as what the WTO suit regarding Airbus launch aid is all about.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Wsp
Posts: 356
Joined: Sun May 06, 2007 7:43 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 1:42 pm

Quoting Silentbob (Reply 27):
You left out the part about the governments not getting their launch aid back if the A380 program doesn't break even.

Governments will receive their first re-payments from the program on October 15 2007. You can check up on the minimal terms of the RLA here:

http://www.ita.doc.gov/td/aerospace/agreements/usaeulca.pdf
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 2:17 pm

Quoting Atmx2000 (Reply 28):
If it were free trade, the foreign government wouldn't be meddling in the decisions of its airlines for its advantage to begin with.

But surely there are examples where the foreign governments meddle at the behest of Boeing and/or Washington? Israel and Taiwan and the usual examples. Saudi Arabia, China and South Korea might also be considered examples. In other words, the interference of the US is not a response to a lack of free trade but the cause of it.

And, no, I'm not for one second suggesting that Washington is alone in doing this or that Airbus hasn't also benefited from such political arm-twisting.
 
Wsp
Posts: 356
Joined: Sun May 06, 2007 7:43 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 2:35 pm

I think absurd protectionist measures like this:

"Final assembly of this aircraft was completed in the USA"
http://safety.mania.ru/img/delta_b767-300_1.jpg

have roughly the same effect as Mr. Brown calling Mr. Walsh to discuss how BA could remodel their future fleet plan around Airbus models when they have already designed it around Boeing's planes capacities.
 
D328
Posts: 226
Joined: Fri Jul 13, 2007 1:50 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 3:01 pm

WOO another B v A war.....
 
PlaneHunter
Posts: 6538
Joined: Tue Mar 14, 2006 3:17 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 3:09 pm

Quoting N1786b (Thread starter):

So much for the "They will buy what they feel is best for their business."

And where exactly is the passage where BA confirms its giving in to pressure?

Quoting Byrdluvs747 (Reply 11):
So maybe the US govt should put pressure on US carriers to buy only Boeing. Can you imagine the whining that would come from Europe?

How would that be different from the talk we hear today on the opposide side?

Quoting Ikramerica (Reply 16):
People dismiss me when I say that there is heavy pressure on AF, LH and BA to buy Airbus, and more so on the smaller airlines.

If you proved some of your points, nobody would "dismiss" you.

Quoting Ikramerica (Reply 16):
The bigger carriers all switched to A320 series for narrowbodies, and LH also went entirely Airbus until the 748i order.

Please, not the old LH myth again. Check their history of orders only once and you might discover an absence of any B777 product when LH ordered its first A340s, for example. But if you are so sure about LH's orders being fishy, why don't you provide any source?

As for European carriers which have ordered Airbus narrowbodies - apart from "political" reasons there are other aspects to be considered such as price, availability, engine choice, flexibility (A319, A320, A321) etc. Or do you want to suggest all these carriers have only ordered Airbus due to politics and those (numerous) European carriers with B737NGs have done so only due to performance reasons?

Quoting Ikramerica (Reply 16):
And I highly doubt that AF will go Boeing in the future as the A350 comes available.

Just like when AF ordered the A346?  Wink  Yeah sure

Quoting Ikramerica (Reply 16):
But that pressure doesn't seem to be that effective, because US just added more A320 series despite the order being large enough to go either way,

It doesn't prove anything if one of the largest Airbus customer in the world orders more aircraft of the same type (price, availability etc...) And in the end commonality of one fleet for the same job saves money over two different fleets for the same job.

Quoting Ikramerica (Reply 16):
and VX started up with A319s, as did Skybus, and for the latter two, municipalities are going out of their way to accommodate the new airlines. If the pressure were really strong, the local support would have been somehow tied to buying "American."

If a company creates jobs, most authorities are happy, no matter where the equipment comes from. Again, this doesn't prove anything.


PH
Nothing's worse than flying the same reg twice!
 
wdleiser
Posts: 865
Joined: Thu Apr 22, 2004 9:32 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 3:21 pm

i am sick of the nationalistic bullshit

the british government has no right to tell BA to buy AB nor does the french or the germans have the right to tell their respective airlines what to buy

same goes towards the US carriers, the US has no right to tell AA or CO or any one what to buy. I hope all this BS stops soon
 
AirTranTUS
Posts: 3313
Joined: Tue Jun 21, 2005 9:12 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 3:39 pm

Quoting AirNZ (Reply 12):
Quoting Byrdluvs747 (Reply 11):
So maybe the US govt should put pressure on US carriers to buy only Boeing. Can you imagine the whining that would come from Europe?

Are you honestly telling me they don't......or do they only do it with the likes of Israel?

If they did, why does B6, Virgin America, Skybus, NW, and US have A320 family aircraft? Your argument there holds no water.

Quoting Byrdluvs747 (Reply 11):
So maybe the US govt should put pressure on US carriers to buy only Boeing. Can you imagine the whining that would come from Europe?

There would be a whole boatload, but thankfully our government does not interfere the way theirs does.
I love ASO!
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 3:52 pm

Quoting AirTranTUS (Reply 35):
thankfully our government does not interfere the way theirs does

There is one European government?!  wideeyed 
 
AF2323
Posts: 54
Joined: Sat Aug 04, 2007 6:00 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 3:56 pm

Quoting Ikramerica (Reply 16):
One can say that "they are the best planes for them" but that doesn't hold water when scrutinized. Not because Airbus aren't good planes, but because the result here would imply that while to the rest of the world Boeing and Airbus have competitive products, for some weird reason, in the EU, Airbus products are superior for the smaller carriers as they routinely win out (unlike in the USA, where in the last 15 years, the battle has not gone exclusively to Boeing). The logic doesn't hold unless there are strong government influences involved.

If you are European and you have two similar products, it seems logical to choose the european one. The only product from Airbus that is inferior to its Boeing counterpart is A340-500/600. Even in Europe, it is by far trailing the 777 by sales. Smaller carriers uses smaller planes than 777, and there is a strong offer from Airbus in this size of planes... governments surely influences decisions, but even without it, Airbus would still be dominant in Europe, in the same way that Boeing is in USA.
 
PA101
Posts: 326
Joined: Sun Jan 16, 2005 10:28 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:02 pm

Quoting Byrdluvs747 (Reply 11):

Well, they might not be able to penalize carriers, but the mandatory introduction of mentioning the country of final assembly on the security information cards for US carriers was no doubt a matter of getting the public to pressurize carriers to buy American.

I personally think that governments should get never involved, but with people necessarily running them, they will always try to influence carriers to support their local producers (sometimes more or less threatening with subsidies, government-business etc. pp.)... I just hope that carriers will get more and more immune to those "influences"...
 
User avatar
LTU932
Posts: 13725
Joined: Fri Jan 06, 2006 12:34 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:10 pm

Quoting N1786b (Thread starter):
So much for the "They will buy what they feel is best for their business."

Don't declare defeat just yet. Let's wait and see if BA really does buy the A380. IMO they'll rather go for the 747-8I or 77W than the A380.

Quoting CygnusChicago (Reply 10):
Well, the French government pressured AF to buy Airbus, and they still went for the 777.

And yet people continue with the myth that AF will buy what the government tells them, same for LH. Sometimes I wonder why A.net myths like these don't die when they're disproven, like with the AF 777 order or LH ordering 747-8Is.
Sometimes the only thing more dangerous than a question is an answer. - Ferengi Rule of Acquisition 208
 
n1786b
Topic Author
Posts: 385
Joined: Tue Sep 27, 2005 6:10 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:13 pm

Quoting PA101 (Reply 38):
Well, they might not be able to penalize carriers, but the mandatory introduction of mentioning the country of final assembly on the security information cards for US carriers was no doubt a matter of getting the public to pressurize carriers to buy American.

 checkmark  Yea, it was politics.

However, if it is mandatory to put the country of origin on the clothes you wear, the car you drive, and the food you eat, why not the plane you fly in?

- n1786b
 
worldrider
Posts: 216
Joined: Sun Nov 25, 2007 11:26 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:41 pm

"British government urging BA to buy airbus" ... in order to protect uk jobs..ehh since when uk governement cares about their own people opinions? i would rather say "Brithish governement urging BA to buy Boeing" of course it won't appear in the newspapers. my opinion is based on historic facts ..

p.s. you will find them if you want see them!
 
columba
Posts: 5252
Joined: Fri Dec 10, 2004 10:12 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:45 pm

Quoting Ikramerica (Reply 16):
And I highly doubt that AF will go Boeing in the future as the A350 comes available.



Quoting Ikramerica (Reply 16):
The bigger carriers all switched to A320 series for narrowbodies, and LH also went entirely Airbus until the 748i order.

I think European Airlines such as AF, BA and LH have no intention to become dependant on one manufacturer so they will operate at least one type of a different manufacturer while airlnes like CO and DL have nothing against an all Boeing fleet because of their "gentleman´s agreement".
It is a different approach on fleet management.
Regarding AF and the A350 this remains to be seen since AF has engines preferences that are not available with the A350 so far. So this will be interesting, I can see them following their previous strategy of a mixed fleet using both the 787/A350. They have done that before with the 777/767/A330/A340/A310/A300 and it worked for them.
BA has indicated that they would order 787s and A350s as well since they consider them different aircraft for different missions. So 787-8s and A350-900s like SQ seems likely.
The reason why many airlines in Europe have chosen the A32x series over the 737NG is easy to explain.
First the A32x came out earlier as the 737NG and offered a better variety of different aircraft from the A319-A321.
Boeing finally has closed that gap with the 737-900ER but it came to late for many airlines.
The A321 is the ideal aircraft for European airlines. It has replaced widebodies as the A300, A310 and 767 as well as the slightly larger and heaviernarrowbody 757 on domestic and European routes not even with the major carriers but with most leisure carriers as well.
European airlines did not need the extra power and range of the 757 or A310 and have a very cost effective and efficient aircraft with the A321.
Air Berlin - gone but not forgotten
 
worldrider
Posts: 216
Joined: Sun Nov 25, 2007 11:26 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:49 pm

as for all western democacies, uk government cares about power, multinational interests and their deers shareholders
after all, who pays their political campaigns? and who owns the media ..."opinions"?
 
BCAL
Posts: 2925
Joined: Mon Jun 28, 2004 10:16 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:51 pm

It seems surprising to me that the UK government is willing to allow foreigners to gain control of the UK energy suppliers, UK airports, some of the rail franchises, major industries that were once a British institution, and then they have the cheek to dictate to BA, a public owned company fighting against competition at every level, as to how they should manage their business and what aircraft to order. Could this simply be because there is talk of an election round the corner and MPs want the public to feel that they are supportive to preserve UK jobs, industry, and orders? Once the election is out of the way, the same MPs will probably willingly order an American built aircraft for the Queen's fleet and government use, complete with US engines and components manufactured anywhere except the UK. Hypocrites!

The press have probably picked up a snippet of information that 30-40 years ago, when BA (or its predecessors) was state-owned entities run by civil servants, the Ministers made the final decisions. BEA managers then wanted the 737 in their fleet, as this was then the best aircraft suited for their requirements. The UK government ordered them to place orders for the Trident 3 aircraft, a British aircraft which was simply a "stretched" version of an old design powered by old under-powered engines (a fourth "booster" engine was required for take-offs). The result? Tridents 3 were ordered and BEA received handsome compensation from the government to cover the additional costs of operating them, as opposed to the 737s.

Any why pick on BA? Was there any backlash when VS ordered their 787s in preference to Airbus aircraft? Was Branson under any pressure from the UK government to order Airbus or RR engines? After all, Branson often claims to be supportive of British industry and often claims that VS, not BA, is the UK's flag carrier so there is even more reason for the UK government to lean on him. And imagine Branson's ecstasy when he could claim, "Virgin, not BA, has shown their faith in British industry and has now placed orders with Airbus that will guarantee the jobs of thousands of British people!" Hold on, those comments might upset the Americans whose favour and support he now needs for Virgin America.
MOL on SRB's latest attack at BA: "It's like a little Chihuahua barking at a dying Labrador. Nobody cares."
 
LY777
Posts: 2587
Joined: Fri Nov 25, 2005 6:58 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:54 pm

This is what I said from the start, BA will buy A350s and not 787s
Flown:717,727,732,733,734,735,738,73H,742/744/748,752,753,762/2ER/763/3ER,772/77E/773/77W, 788, 789, DC8,DC10,E190,E195,MD83,MD88, L1011, A3B2,A319,A320-100/200,A321,A332/A333,A343,A388
 
Danny
Posts: 3753
Joined: Thu Apr 25, 2002 3:44 am

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:55 pm

Quoting N1786b (Thread starter):
So much for the "They will buy what they feel is best for their business."

They always did so before and as much as government may have their wishes BA does not have to listen to them.

On the other hand doesn't DL, CO, AA buy only Boeing because its American (at least in theory)?
 
User avatar
PM
Posts: 5390
Joined: Wed Feb 09, 2005 5:05 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:59 pm

Quoting LY777 (Reply 45):
BA will buy A350s and not 787s

They will buy both.
 
cartoonranger
Posts: 77
Joined: Tue Aug 02, 2005 11:47 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 4:59 pm

To me this article is all about "setting up" a major headline when the order is announced.

If they buy airbus, the paper will be able to claim that government pressure forced BA into the decision and they can then paint a picture of a forceful Prime Minister etc etc.

If they go Boeing, then the paper are able to criticize BA for not supporting the UK economy (even though it possibly would) and they can then make a big point on how the government has lost any influence on one of Britains institutions.

Personally, i hope they buy a bit of both. That would make the potential Scandal Headlines less impacting and the airline would probably get exactly the aircraft they are after.

And the fact that they are "under government pressure". Well, who knows. And until someone in authority comes out and says they were, then "WE" (innocent bystanders) will never know and can keep on hypothesising till the next big order is announced
 
columba
Posts: 5252
Joined: Fri Dec 10, 2004 10:12 pm

RE: UK Gov't Pressuring BA To Buy Airbus

Wed Sep 12, 2007 5:00 pm

Quoting PM (Reply 47):
They will buy both.

 checkmark  This what they have said recently at least as an option and I think it is very likely.
Air Berlin - gone but not forgotten

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos