More fuel for Boeings WTO argument vs Airbus?

America West has long been a big Airbus buyer..in part because of low finance charges. In the early 90s, it was ordering 320s and getting a $1million “rebate” with each one. This at the same time it was trying to get the city of Phoenix to build a new maintence base for them.
I wrote a letter to the the Phoenix paper pointing out this odd occurance (not supporting American workers while wanting local taxpayers to give them money).

I got a phone call from an AW pilot who called me every name oin the book…he was probably drunk and at hot head at the very least.
Real professional! :rolleyes:

U.S. House panel moves to shield Boeing from EADS

Just posted in the Modern Military Aviation forum:

U.S. House panel moves to shield Boeing from EADS
Fri May 20, 2005 05:56 PM ET
By Jim Wolf
WASHINGTON (Reuters) – The House of Representatives’ Armed Services Committee said on Friday it had voted in effect to shield Boeing Co. from competition from Europe’s largest defense contractor for a projected $50 billion U.S. aerial-refueling aircraft market.

The panel neither singled out nor named EADS, which wants to offer a tanker version of its Airbus A330 to the U.S. Air Force.

Instead, it voted to bar the acquisition of a major weapons system from any foreign company that gets what the United States has protested as a government subsidy barred by the World Trade Organization, said spokesman, Josh Holly.

“This provision is included in the bill as voted out of the committee,” he said.

Chicago-based Boeing stands ready to compete for a tanker contract “under whatever terms the Department of Defense and the Air Force define,” said Douglas Kennett, a company spokesman.

A spokesman for EADS’ North America unit, Guy Hicks, said, “This is a government-to-government issue and needs to be resolved at that level.”

“EADS North America is committed to contributing to the nation’s defense and will continue to invest in the U.S. to meet that objective,” he said.

Last year, the United States filed a WTO case challenging French, German, British and Spanish government loans to Airbus for the development of new aircraft. Airbus overtook Boeing in 2003 as the world’s largest supplier of commercial aircraft.

The measure that would shield Boeing was part of the fiscal 2006 Defense Authorization bill adopted by the panel on Thursday. Approved 61-1, the $441.6 billion bill is expected to be considered on the House floor next week. The Senate version does not contain such a provision.

A 28-page press release highlighting key provisions omitted the “Prohibition on Procurement from Beneficiaries of Foreign Subsidies,” an amendment offered by the panel’s chairman, Duncan Hunter, a California Republican. The provision was first reported by Congressional Quarterly.

Last year, Congress killed a $23.5 billion Air Force plan to lease and buy 100 Boeing aircraft to start phasing out aging KC-135 mid-air refuelers after a procurement scandal.

Since then, Pentagon leaders have said they would hold a competition for any tanker purchases. The Air Force is studying whether to upgrade or replace its fleet of more than 530 tankers. The competition has been expected to start next year.

Hunter, a long-time proponent of so-called “Buy America” legislation, seems to have found a way to express his concerns about foreign dependency “that will resonate across the political spectrum,” said Loren Thompson of the Lexington Institute, an Arlington, Virginia, research group with close ties to the Pentagon and defense contractors.

“The political system is waiting for an excuse to go after Airbus,” he said.

© Reuters 2005. All Rights Reserved.

It is surely an argument for Boeing in the dispute. However it even speaks more clearly against the A350, as I would understand that you have to give the plane for free to get somebody interested. So perhaps Boeing should see the bright site of the deal.

Ah… the biter bit. :D:D:D

Actually, Sandy, I wouldn’t. I’d be maintaining the same consistent line as always – they’re both at it.

Were I so minded, I could mention Boeing’s massive discounts to Ryanair, or the offsetting of the value of Singapore Airlines Airbuses against an order for Boeing aircraft. What are these, if not inducements?

The airliner business is just that – a business. Not a team spectator sport or a titanic life and death struggle between the forces of Light and Darkness. But perhaps you disagree? 😀

Businesses the world over do whatever it takes to capture orders. Why should Airbus and Boeing be exceptions to this?

Boeing is not in the business of buying their orders.

Discounts and part exchange are VERY normal, both are at it. Everyone is at it.
However injecting cash into an airline and then getting orders and exclusivity was called bribery last time it occured (funnily enough with Airbus in india and to some extent Boeing with the tanker deal although that is not a direct comparison)

Euro-bashing and transatlantic willy-waving belong over in General Discussion, US Agent.

This is Commercial Aviation. 🙂

Grey Area
Moderator

You’d be saying things differently if Boeing had done the same

Ah… the biter bit. :D:D:D

Actually, Sandy, I wouldn’t. I’d be maintaining the same consistent line as always – they’re both at it.

Were I so minded, I could mention Boeing’s massive discounts to Ryanair, or the offsetting of the value of Singapore Airlines Airbuses against an order for Boeing aircraft. What are these, if not inducements?

The airliner business is just that – a business. Not a team spectator sport or a titanic life and death struggle between the forces of Light and Darkness. But perhaps you disagree? 😀

Businesses the world over do whatever it takes to capture orders. Why should Airbus and Boeing be exceptions to this?

I would just like to add this to my last post. You are right Bmused, this could come back and bite EADS in the rear end should the merger fail to generate the numbers mentioned by various financial news outlets. I guess time will tell if this will have been the right decision.

So let me get this right, you consider it fair to offer a cash incentive to an airline to order and stay exlusive to a particular manufacturer? As thats what you just said.

After all, this could only save thousands of jobs in the US

Yes, COULD. It is also possible this deal could worsen US Airway’s financial problems. Even with the collective cash injections, the US/HP merged airline will still have financial debts and this deal with airbus will sink them further into debt.

I don’t think EADS sees this US$250mil as a cash incentive but rather as an investment. And I think that it is only normal for US/HP to become an exclusive customer to Airbus otherwise the merger might not have become a reality and one of these two companies would have had very little chance of surviving. Of course another investor could have supplied US with the necessary funds to create this merger. However, I am sure that if Boeing had chosen to do something similar to what EADS did, then the US/HP fleet would have become an all Boeing fleet! Cheers!

Bmused, I would like you to explain how Airbus investing US$250mil in the US Airways and America West merger would is an unfair practise. I am sure that if Boeing was given the opportunity to the same, it might just do the same. As far as I see it, this is strictly an investment for EADS and if they should benefit by getting exclusive sales right with this airline, than why not! After all, this could only save thousands of jobs in the US. Conidering the state of American airlines in general, I am sure that no one will mind EADS doing what it is doing.

So let me get this right, you consider it fair to offer a cash incentive to an airline to order and stay exlusive to a particular manufacturer? As thats what you just said.

After all, this could only save thousands of jobs in the US

Yes, COULD. It is also possible this deal could worsen US Airway’s financial problems. Even with the collective cash injections, the US/HP merged airline will still have financial debts and this deal with airbus will sink them further into debt.

Bmused, I would like you to explain how Airbus investing US$250mil in the US Airways and America West merger would is an unfair practise. I am sure that if Boeing was given the opportunity to the same, it might just do the same. As far as I see it, this is strictly an investment for EADS and if they should benefit by getting exclusive sales right with this airline, than why not! After all, this could only save thousands of jobs in the US. Conidering the state of American airlines in general, I am sure that no one will mind EADS doing what it is doing.

It’s rather common biz practise, though perhaps not on such a scale. Earlier GECAS borrowed money to USAirways. You can be sure that GECAS did not do that because they where feeling generous!

Indeed.

It’s not Fair game though. Very anti competative. Something I’m sure Boeing will press upon the WTO if they take this example to them.

It’s rather common biz practise, though perhaps not on such a scale. Earlier GECAS borrowed money to USAirways. You can be sure that GECAS did not do that because they where feeling generous!

Any point? That’s business for you, mate.

It’s dog eat dog out there.

You’d be saying things differently if Boeing had done the same 😉

(thought I’d try it on for size)

Opinions folks

Any point? That’s business for you, mate.

It’s dog eat dog out there.