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Boeing vs Airbus

By | October 2008
Page 1 of 10
INTRODUCTION

After cooling off with the signing of the 1992 subsidy agreement, the longstanding dispute between Europe and the United States over government subsidies for the commercial jetliner industry heated up again in 2004. This time, however, the stakes were higher since both the Americans and the Europeans filed complaints at the World Trade Organization over government subsidies paid to their respective commercial jetliner companies. The dispute over subsidies has heightened trade tensions between the United States and Europe, as Airbus and Boeing spar for dominance in the highly competitive commercial aircraft Industry. Achieving and maintaining global competitiveness in commercial aviation is a major goal of both the Americans and the Europeans. This industry is of critical importance to the people of both regions in terms of its impact on technological development, economic growth and employment, national prestige and national defense. Boeing is the largest single U.S. exporter, and Airbus plays an increasingly important economic role throughout the European Union. While European companies were the first to produce commercial jetliners in the 1950s, American companies quickly followed, and by learning from European mistakes, they leapfrogged ahead. By the 1960s, three American firms Boeing, Lockheed, and McDonnell Douglas dominated the global jetliner market, and government officials in Europe became concerned that the weak and divided European commercial aviation industry would be wiped out. In response, four European governments pooled their resources to establish a single transnational manufacturer that they hoped could compete against the Americans. The result was the formation of Airbus in 1969, a consortium owned initially by independent aviation companies in France and Germany that were joined later by Spanish and British firms. The companies overcame their nationalistic instincts and cooperated to produce commercial jetliners under...

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