Airbus A350 announced.

Originally posted by AceOfBase
BTW, if tax breaks are not a subsidy, why are loans that must be paid back called a subsidy?

Hmmm, when the loan does not have to be payed back untill a certain production level or profitablity figure has been reached that for sure is a competative advantage.

This is the most one eyed argument that this board has seen. Americans bleating about 'unfair subsidies' to Airbus which are actually loans that are repaid whilst being simultaneaously unable or unwilling to consider the billions in free gifts, or tax braks, that Boeing has recieved for decades and continues to recieve. Whats in a name? Tax breaks are fair but loans, sorry subsidies, are not?

I suppose Boeing position in the civil market was secured by dint of American industry purely having the best product and no underhandedness ever crossed their minds? Grow up guys and go tell it to the sales teams responsible for flogging the VC.10, acknowledged as superior to the equivalent Boeing 707 by dint of its quiet cabin and efficient uncluttered wing the story of the dirty tricks pulled by Boeing to kill off potential sales is covered in Charles Gardners book 'The British Aircraft Corporation' which is a fascinating read about the successes and failures of this company from an insider.

Basically Boeing has been calling the shots since the 1950's and now they aren't anymore they are crying that they want their ball back, its pathetic, whats more Airbus aren't even pulling stunts with this, they are recieving LESS money than Boeing AND paying it back. Whats to complain about?

[edit on 11-12-2004 by waynos]

Originally posted by waynos
This is the most one eyed argument that this board has seen. Americans bleating about 'unfair subsidies' to Airbus which are actually loans that are repaid whilst being simultaneaously unable or unwilling to consider the billions in free gifts, or tax braks, that Boeing has recieved for decades and continues to recieve.....

.......the story of the dirty tricks pulled by Boeing to kill off potential sales is covered in Charles Gardners book 'The British Aircraft Corporation' which is a fascinating read about the successes and failures of this company from an insider.

Basically Boeing has been calling the shots since the 1950's and now they aren't anymore they are crying that they want their ball back, its pathetic, whats more Airbus aren't even pulling stunts with this, they are recieving LESS money than Boeing AND paying it back. Whats to complain about?

- 100% Waynos.

Nutshell. It. In. A. Way above for that mate.

They destroyed our aero-industry with a sack-full of politics and dirty tricks and now cry like babies as we compete them off of the 'pitch'.

"Target" their (!?) major industries?! Ha!

That's the kind of laughable complacent stupidity that got them into this mess in the first place!

(.....and you got to laugh at that 'hurried to the market' and 'barely modified' press release garbage.....they must be getting desparate! )

FredT - I thought you might have something to say, which is why I prepared this lot

Basically the issue is that Airbus has overtaken Boeing in commercial sales, and now Boeing contends that Airbus shouldnt be allowed to receive subsidies as the dominent aircraft manufacturer in the business. Specifically the issue is that Airbus can receive in loans up to 33% of the development cost of the aircraft, repayable in 17 years, which was agreed upon in the 1992 agreement.

What Boeing is essentially saying is "we agreed to something when we were the dominent party, and now we arent we dont like it". Boeing is complaining that Airbus has received $47billion in subsidies or loans since 1967, but funnily enough Boeing itself has taken in $18billion just since the 1992 agreement.

With a lot of experts saying the money Boeing receives is probably illegal under already proven WTO rules, it looks like there could be two outcomes if this is persued to the WTO ruling body:

1. Boeing looses subsidies, Airbus looses subsidies. Planes become a lot more expensive. Import duties get slapped on aircraft, US buys from Boeing, Europe buys from Airbus, rest of world shrugs and continues on as normal.
2. WTO rules Airbus subsidies are within the 1992 agreement, Boeing looses subsidies.

and at the moment, its looking like number 2 is the most likely, since nearly all of Boeings complaints are covered under the 1992 agreement, which the WTO is more than likely to look to to validate the claims. Option 1 happened during a WTO dispute between Embraer and Bombardier, both were given the goahead to apply duties on the others goods, and as a result nothing changed.

The only issue that Boeing is persueing that doesnt fall under the 1992 agreement is that EADS and British Aerospace (the two shareholder owners of Airbus, 80% EADS 20% BAe) both receive military subsidies, but Boeing has been unable to prove any financial link there as Airbus does not financially rely on either EADS or BAe. This would be like IBM going to its shareholders and begging for money.

On another note, Airbus is considering legal action in the US over a US Airforce service man passing company secrets and internal information to Boeing during the US airforce procurement of twin engined tanker aircraft. The airman in question was recently sentanced to a jail term for this action, and Boeing is blocked from bidding for future tanker aircraft procurements and NASA space launches while a government investigation is underway - the top two executives of Boeings board of Directors were dismissed after being arrested for this issue.

The EU says Boeing has pocketed some $18bn in direct and indirect subsidies since 1992, including a $3.2bn tax break from the authorities in Washington state, where the firm has assembly operations.

news.bbc.co.uk...

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Under the current agreement, European governments can lend money to cover up to 33% of plane manufacturers' research and development costs. This money is repayable with interest within 17 years.

Questions have also been raised about the $3.2bn incentive package offered by Washington state to secure the assembly plant for Boeing's new 7E7 Dreamliner plane.

news.bbc.co.uk...

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Boeing chicago office subsidy

www.ctbaonline.org...

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Boeing received illegal subsidies

www.findarticles.com...
www.buffalo.edu...

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The development costs are US$12 billion for the Airbus A380 and at least US$8 billion for Boeing's 7E7, according to analysts including Paul Nisbet at JSA Research in Newport, Rhode Island.

Of that, aid for the 7E7 is as high as three-quarters of the development costs, the EU says, compared with 33 per cent for the A380, which will be the world's largest passenger plane.

"Europe and Airbus have the strongest case in years against Boeing - from several new 7E7 subsidies to the longstanding allegations of indirect Boeing support through US military and aerospace programs," said Kaplan, who specializes in WTO subsidy issues and has worked on aircraft industry disputes.

www.defenceindia.com...

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Both would loose subsidies if case is brought

seattlepi.nwsource.com...

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More on 7E7 production facility subsidy

www.youareworthmore.org...

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Illegal subsidy for the 7E7 launch

The paper also documents that close to half of the launch funding comes from subsidies worth nearly $6 billion that may violate international trade agreements, and warns of an impending "subsidy war" as competition for the commercial aircraft market between Boeing and Airbus heats up further.

The Japanese support to Boeing for the 7E7 program�and potentially, launch purchases by ANA, All Nippon Airways Co., Ltd., and JAL, Japan Airlines�hinges on Boeing's use of Japanese manufacturers for a significant portion of the airframe.

That fact alone could classify the Japanese subsidy as "prohibited" under World Trade Organization rules, say the UB researchers.

The State of Washington's $3.2 billion subsidy, most of which is related to production (assembly) of aircraft, also could be classified as "actionable," the UB researchers state, because production subsidies violate WTO regulations and the 1992 U.S.-European Union Agreement on Trade in Large Civil Aircraft.

www.buffalo.edu...

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Export subsidy that helped Catepillar and Boeing repealed after ruling illegal by WTO

www.aiada.org...

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But the grandaddy of aid going to Boeing comes from Japan. This emerged last November when Airbus persuaded the EU to investigate a $1.5 billion subsidy that the Japanese government is, in effect, putting into the 7E7. A consortium of three companies, the heavy-industry parts of Fuji, Kawasaki and Mitsubishi, will make the wings and fuselage wing box for the 7E7. This is the heart of any plane, and the fact that Boeing has decided to outsource it to the Japanese is highly significant.

Boeing has always resisted Japanese requests to get their hands on important aircraft-making technology in return for Japan�s airlines buying from Boeing. But to win a big launch order for the 7E7 and get financial help, it has had to let the Japanese become key suppliers. All this makes for a tangled web of claim and counter-claim for the WTO to get to grips with, even before it begins to affect other trade issues.

economist.com...

Originally posted by shots

Do you perhaps have some further info that backs up what the Heard States. Also why are you putting in state tax breaks? I do not consider those as a subsidy per se. It is not uncommon at all for states to give companies breaks to remain where they are.

I would really be interested in seeing just how japanese subsidies to suppliers plays a part in the picture. Are you saying that Japan is subsidizing boeing or are you saying Japan is subsidizing its suppliers. They have been doing that for years?

This is a whole new thing to me so bear with me; while I sort out what each side is claiming, so I can make my own mind up who is right and who is wrong.

See my other post for links.

We include tax breaks because thats what the WTO considers subsidies as well, so they will be looked at if this dispute goes further. Its not just people on this board saying 'oh but theyve doine this....', its actually stuff that will get Boeing into trouble if they push the Airbus thing.

As for the Japanese scene, again one of my links deals with that, but the subsidies Boeing essentially receives (low cost or free parts for the 7E7 through Japanese subsidisation of companies producing those parts) are almost certainly illegal under WTO rules already, so again its something that will get Boeing into trouble.

If this gets pushed, then Boeing stand to loose big as well.

Originally posted by FredT

Hmmm, when the loan does not have to be payed back untill a certain production level or profitablity figure has been reached that for sure is a competative advantage.

Boeing *agreed* to those terms in 1992. And the option is there for Boeing to do *exactly* the same! I still contend that this is simply Boeing not liking being the underdog on terms it agreed to.

Quality work Richard.

Way above matey!

Agreed, can anyone realistically argue against that little lot?

Originally posted by AceOfBase
BTW, if tax breaks are not a subsidy, why are loans that must be paid back called a subsidy?

The answer as I see it is simple using their definition:

tax break -- (a tax deduction that is granted in order to encourage a particular type of commercial activity)

loan- (Something lent for temporary use.)

I fly to Europe just about every year. And there is nothing more uncomfortable than sitting in one of those cramped jets for 8 to 9 hours. I cannot comprehend the thought of doing that for 12 to 15 hours. I certainly hope the airlines that use these jets won't go with the typical configuration of a 17" wide seat and a 31" pitch. It just isn't healthy.

Originally posted by Indy
I fly to Europe just about every year. And there is nothing more uncomfortable than sitting in one of those cramped jets for 8 to 9 hours. I cannot comprehend the thought of doing that for 12 to 15 hours. I certainly hope the airlines that use these jets won't go with the typical configuration of a 17" wide seat and a 31" pitch. It just isn't healthy.

It is not about comfort my man. It is about how many they can pack, stack and rack on them to make the register go cha ching.

I think the only way you can really get a nice seat is to pay first class and even then I am not sure all seats are that much better.

I just flew first class the Vegas the end of September and I honestly did not see any difference in the seats from FC to Ecc but that was on Midwest, all of their seats are configured one way only and I think that is business class. Well at least I got three cookies instead of one. Does that count as first class service these days? I honestly do not know.

Originally posted by Indy
I fly to Europe just about every year. And there is nothing more uncomfortable than sitting in one of those cramped jets for 8 to 9 hours. I cannot comprehend the thought of doing that for 12 to 15 hours. I certainly hope the airlines that use these jets won't go with the typical configuration of a 17" wide seat and a 31" pitch. It just isn't healthy.

If you have the fortune to ride on a A380 in the future, then you will be entitled to 10% wider seating on all classes of seating In the standard 2-3-2 seating configuration, the A380 is wider than any other class aircraft, and since that configuration is the only one the FCC has thus certified, you shall travel in more style than current aircraft.

Re a380...

Ya and you get to wait FOREVER to get through customs on the other side when 3 of them unload at once into the 4 open custom booths... have fun with that.

The reality is, except for very few routes the 380 is NOT a viable option. The 7E7/350 are a MUCH better fit for the long term direction of the industry.

As an aside, did Airbus ever get the clearance to extend their runway (they were denied permission on environmental grounds for a runway extension at their major facility for the 380)

Osiris

Originally posted by otlg27
Re a380...

Ya and you get to wait FOREVER to get through customs on the other side when 3 of them unload at once into the 4 open custom booths... have fun with that.

The reality is, except for very few routes the 380 is NOT a viable option. The 7E7/350 are a MUCH better fit for the long term direction of the industry.

As an aside, did Airbus ever get the clearance to extend their runway (they were denied permission on environmental grounds for a runway extension at their major facility for the 380)

Osiris

And surprise surprise, those 'few routes' (not as few as you think, Airbus have already sold 139 planes with options on a lot more) are what Airbus is aiming the aircraft at.

Basically, airlines want to move more passengers between hubs, and that is where the A380 comes in, the airports can handle the passenger load as its jsut like two 747s unloading at once, they would go through different lounges and customs points.

I know the Toulouse facility runway was extended earlier this year or late last year, the A300-600 supercarrier couldnt use its reverse thrust on the engines for a week or so after to let the tarmac set.

Richard,

The only problem with the target a380 market is the hub and spoke system doesn't appeal to the passanger, this has been proved over and over again. I'm not knocking Airbus as a company (although, honestly I find their planes having flown most every model, noseier and stiffer in the wings, hence more bumpy than Boeing equivalents)

Airbus has done a lot of things Boeing could learn from. I don't think the A380 is one of them. I think (personally) the A380 will be an unmitigated disaster. 139 orders can change real quick and it will take YEARS to deliver that many planes, so quoting that number is (no offense) completely irrelevant.

You also forgot to mention that several airlines have requested delayed delivery on some of those 139 due to facilities around the world not being ready.

Nope, small ( .84M, efficient, long-range >8000nm planes are the way of long haul flights of the future. Last thing *I* as a consumer want is:

Fly to hub X, get on 500+ person cattle car to fly to Hub y, to get on another plane to get to my destination. Maybe I'm biased because I practically live in the air, but point-to-point is where it's at.

Osiris

Originally posted by otlg27
Nope, small ( .84M, efficient, long-range >8000nm planes are the way of long haul flights of the future.

Aside from the *small* requirement, I don't see much difference between the specs you listed and the specs for the A380.

aerospaceweb
Speed, Max Level Speed:
at altitude: 595 mph (955 km/h) at 35,000 ft (10,675 m), Mach 0.89
at sea level: 390 mph (630 km/h)
cruise speed: 560 mph (900 km/h) at 35,000 ft (10,675 m), Mach 0.85

Range:
(A380-700) 8,750 nm (16,200 km)
(A380-800) 7,800 nm (14,450 km)
(A380-800F) 5,620 nm (10,410 km)
(A380-800R) 8,750 nm (16,200 km)
(A380-900) 7,800 nm (14,450 km)

As far as fuel efficiency, the per seat fuel usage of the A380 is supposed to be low (at least that's what I've read).