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Boeing slams Airbus subsidies

Boeing chief executive Harry Stonecipher has reignited a simmering transatlantic dispute over state subsidies for aerospace by accusing Airbus of “abusing” a long-standing international agreement between Europe and the US.
Mr Stonecipher said Airbus had come to regard state aid to kick-start aircraft programs as “almost an entitlement”.
He said: “It is (a) we have decided to launch an airplane and (b) we are sending our guys over with a truck to pick up the cash.”
Mr Stonecipher’s comments come just two weeks before the start of the Farnborough Air Show, the biennial gathering of the world aerospace industry, and amid signs that the US may be preparing to take on European governments over their support for Airbus.
European trade officials are in turn considering taking the US to task over funding provided by the Japanese Government and Japanese companies for the launch of Boeing’s new airliner, the 7E7.
Aerospace industry sources said Robert Zoellick, the US Trade Representative, recently met his European counterpart, Pascal Lamy, to serve notice that the Bush administration was unhappy with continued Airbus launch aid.
Airbus has steadily captured market share from Boeing in recent years and is well advanced in the construction of a new model, the A380, which will be the largest passenger aircraft ever made, pushing Boeing’s ubiquitous 747 into second place.
The Boeing/Airbus dispute last came close to sparking a trade war in the early 1990s. A non-binding agreement covering launch aid was eventually stitched together in 1992, but Mr Stonecipher said the pact had run its course.
“Our view is that the 1992 agreement has served its purpose and is probably not effective. It is not being used as it was intended. It has served its purpose and is being abused, in my view,” he said. The agreement called for a gradual reduction in launch aid, and “that has not happened”, he said.
“They get government support for any airplane they build. If they fail, they don’t have to pay the money back. If we fail, it’s our shareholders (who bear the cost).”
Airbus at the weekend angrily rebutted Mr Stonecipher’s comments.
A spokesman said: “Airbus believes in fair trade and strictly adheres to international agreements. The A380 program exemplifies our approach: it was financed in full compliance with the 1992 bilateral agreement. The agreement allows up to 33 per cent of the program cost to be met through government loans which are to be fully repaid within 17 years of first disbursement, with interest and royalties. We are fully compliant with the WTO and the terms of the 1992 agreement.”

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By: steve rowell - 6th July 2004 at 04:43

Parallel with the development of the B-47 the Boeing Company in Seattle, Washington, concentrated its efforts on jet powered tanker projects. At the beginning of the 1950s various studies resulted in the creation of the Model 367-64, a further development of the C-97 with swept-back wings propelled by four Pratt & Whitney J57 engines.
The US Air Force showed some interest, however, it did not have the finances to realise the project. Only a week after the maiden flight of the Boeing B-52 in August 1952 the company decided to venture out on its own and supplied 16 million US dollars, which at that time were the equivalent of 70 million Marks, for the development of the Model 707. This was the name chosen for the tanker, and Boeing intended to offer it as quickly as possible as a civilian plane as well. However, because the project was supposed to be kept as secret as possible, the new tanker was named 367-80. Experts were expecting nothing more than a new version of the KC-97.
Engineers and technicians were constructing for 19 months behind closed doors in Renton near Seattle, then on the 14 May 1954 they were ready: The “Dash-80”, the prototype of the 707 celebrated its roll-out and surprised everyone.
On 15 July 1954 the prototype of the 707 set out successfully on its maiden flight. The certification program, which followed, had its ups and downs. However, after a while any flaws were overcome. Trust in the new plane was growing, even with the US Air Force, who commissioned 29 KC-135 for the Strategic Air Command on 1 September 1954.
After this Boeing intensified its efforts to sell the plane for civil aviation. The US Air Force had no objections, as long as the KC-135 program was kept separate from the development of the civil airliner. On 13 October 1955 the efforts paid off, when Juan Trippe, Boss of Pan American Airways (PAA, later Pan Am), ordered 20 planes of the 707 and 24 DC-8.
Other airlines followed suit. American Airlines ordered 30, Braniff five, Continental four, Sabena three, Air France ten and TWA eight. Many other airlines followed. On 26 October 1958 Pan Am finally used a 707 for its scheduled fight from New York to Paris for the first time.
The introduction of the 707, however, was not entirely trouble free. Pan Am was using six, when on 3 February 1959 one of them suddenly went into a hard right turn, rapidly loosing height, on its flight from London to New York. This happened roughly 800 km away from Newfoundland. The two pilots only just managed to stabilise the plane at a height of 2,000 meters, after the plane had plummeted for over 9,000 meters. It reached a speed of Mach 0.95! One passenger broke his ankle and several others lost their conscience for a short time. The cause of this fault was later found. It was a faulty switch.
Only a few weeks later one of Pan AmÕs 707s, which was on a training flight north of Paris had a lucky escape. At a height of 8,000 ft, (about 2,500 meters), the aircraft stalled at a speed of 120 kts, (about 220 km/h). As a result the plane took a left turn. The crew managed to stabilise the plane just in time, the forces working on the 707 were so great that one of the engines broke off the wing and dropped down on a meadow near the village Pioneis in Brittany. Thank God nobody was hurt. The result of these experiences was, that exercises like these were not repeated. Furthermore Pan Am had to make do with four 707s for a short time. DC-6 and DC-7 were used as substitutes. After a while, however, the 707s proved how good they were. In August 1959 Pan Am started flying from Los Angeles-San to London via San Francisco. The planes flew across the North Pole. Including a tank stop in Goose Bay, Labrador, it took the 707 eleven hours and 20 minutes from San Francisco to London. SAS had been flying this route since 1954 with DC-7 propliners, but with the 707 Pan Am was unbeatable as much as time was concerned. This is why SASÕs passenger numbers dropped. TWA, which was flying the same route with the Lockheed 1649A Constellation, also felt the jet competition and reduced the amount of flights per week from four to two. After the first 707-120 version, five planes of the -220 version followed. They were destined for Brandiff and equipped with JT4A-engines, which provided far more thrust than the JT3C: each rated 70.1 kN instead of 55.5 kN.
Finally at the end of 1959 the first 707-320 Intercontinental came onto the market. It was much bigger and able to carry far more fuel. The range increased to 9,900 km as opposed to the 120Õs 6,460 km. And the flight times could also be shortened, across the Atlantic from East to West to up to 75 to 80 per cent.
TWA transported 28 passengers in the first class and 89 in economy of the -320. The flight time from London to New York Idlewild, today John F. Kennedy Airport, lasted about eight hours, because the -320 could do without the refuelling stop in Gander, Newfoundland. The _120 still had to stop there, even if weather conditions in New York or Boston were absolutely atrocious. Towards the end of 1959 the -320 operated by TWA and Pan Am still had scheduled stops on their westward bound flights. Only about a third of flights from Paris or London to New York had no stopover. However, one did without refuelling stops in Newfoundland in the other direction.
The introduction of the 707 and later of the Douglas DC-8 changed the nature of Transatlantic Aviation. Piston-engined planes were rapidly out of favour with passengers and airlines. They were too slow and incapable of transporting large numbers of passengers. However, jets were soon in favour. BOAC for example managed to increase charter flights by 500 per cent with the introduction of the 707.
According to a Boeing survey, nine 707-120 were sufficient to provide the same amount of seating miles as 25 propeller planes. The decrease of fleets lead to drastic savings with direct and indirect maintenance costs, despite the higher costs of jets.
It is therefore obvious that airlines tried to get rid of their propeller planes. All well-known carriers ordered 707 or DC-8. The German Lufthansa decided for the Boeing 707. From 17 March 1960 four 707-420 with Rolls-Royce-Conway engines started their service.

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By: greekdude1 - 5th July 2004 at 21:08

Its is because of the military the 707’s fuselage is the width it is.
It was originally drafted as a refueler for the USAF and USAAF. With modifications possible for radar sentry’s. Once McDonnell Douglas (then just Douglas Corporation.. hence DC prefix on their planes at the time.) announced the DC-8. not to be outdone, Boeing revised the 707 to a 6 abreast pax liner. This was possible because the USAF and USAAF wanted the fuselage a certain width (the numbers escape me right now), making it wider than the rival DC-8 which would only have 5 abreast seating.

Actually, the commerical 707’s have a widder fuselage than the KC-135 tankers. And although the 707 was marginally wider than the DC-8, the Douglas bird was still able to have a 6-abreast seating configuration. Example: http://www.airliners.net/open.file/061945/L/ . I’m sure there were some airlines, however, that used the ‘Eights’ with a 5-abreast config.

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By: Hand87_5 - 5th July 2004 at 14:57

Not to start another A vs. B row but both are as bad as each other. If Airbus is obtaining unfair advantage over subsidies Boeing is doing very nicely itself over USAF contracts, sometimes won through dubious practices as the now infamous (and suspended) air refuelling tanker issue revealed.

I can’t think of any other industry or any other two companies that love to be at each other’s throats so often… Time to take a new direction methinks…

Yep . it was exactly my point.

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By: 4 engines good - 5th July 2004 at 13:46

Not to start another A vs. B row but both are as bad as each other. If Airbus is obtaining unfair advantage over subsidies Boeing is doing very nicely itself over USAF contracts, sometimes won through dubious practices as the now infamous (and suspended) air refuelling tanker issue revealed.

I can’t think of any other industry or any other two companies that love to be at each other’s throats so often… Time to take a new direction methinks…

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By: Bmused55 - 5th July 2004 at 12:28

Its is because of the military the 707’s fuselage is the width it is.
It was originally drafted as a refueler for the USAF and USAAF. With modifications possible for radar sentry’s. Once McDonnell Douglas (then just Douglas Corporation.. hence DC prefix on their planes at the time.) announced the DC-8. not to be outdone, Boeing revised the 707 to a 6 abreast pax liner. This was possible because the USAF and USAAF wanted the fuselage a certain width (the numbers escape me right now), making it wider than the rival DC-8 which would only have 5 abreast seating.

In a nutshell 😉

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By: Bmused55 - 5th July 2004 at 12:19

Don’t you think that the 707 was derivated from a milary project?

Actually yes it was.

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By: Hand87_5 - 5th July 2004 at 12:13

Don’t you think that the 707 was derivated from a milary project?

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By: Bmused55 - 5th July 2004 at 11:22

I guess that Boeing as usual, “forget” to mention the massive aids that they receive from the pentagone for their military developments. It’s not a direct financement but it helps isn’t it?

This is from a normal business contract. Boeing manufacture Military Hardware, which the government buy from them.
It is not a subsidy.

The American government will also sometimes pay Boeing to research technology but usualy when said technology is purely for use Military use.

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By: Hand87_5 - 5th July 2004 at 11:08

I guess that Boeing as usual, “forget” to mention the massive aids that they receive from the pentagone for their military developments. It’s not a direct financement but it helps isn’t it?

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