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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Elsewhere who wrote (117737)	6/2/2005 5:43:20 PM
From: aladin	Respond to of 794027

Jochen, Yes - you are always a formidable debater. Aid to Airbus since 1992 has been worth $3.7 billion and investment capped at 33 percent of development costs Aid on the A380 alone will exceed that figure. Or are you just quoting direct top level subsidies and not the guaranteed loans? The 777 cost Boeing $4 Billion to develop, the A380 with its latest overruns seems to be approaching 12 Billion Euros. What is 33% of 12 Billion? :-) Answer - enough for Boeing to develop a whole new aircraft or the amount guaranteed by the Euro governments to reduce Airbus's risk. How much European Government money went to the Military and Space budgets of BAE and EADS and their suppliers? This focus on Boeings subcontractors and location property taxes could be extended to Airbus. For example Airbus has received more than $1.5 billion in local-government support on the A380 - all of it up-front and immediate. The city of Hamburg alone shelled out $800 million to expand an Airbus production plant for the A380. The big Washington State tax break given to Boeing for the 787 that the European press is complaining about is spread out over 20 years. So while impressive at 3.2 Billion it only provides a couple of hundred million during the design & launch phase and if the program craps out - so does the break. We could solve this simply in two ways - reorganize Boeing to separate Commercial Airplanes as a separate entity and provide identical guarantees to reduce its risk or try and make Airbus stand on its own. The 1992 agreement read that launch aid would be available to Airbus until the European company reached relative parity with Boeing. Airbus now controls nearly 60% of the global market vs. less than 30% at the time of the 1992 agreement At what time can you folks compete fairly? If a 60% market share is not good enough what is? Launch aid shifts risk away from the market. Airbus has been able to tap into $15 billion in government loans since its inception in 1970, including $3.2 billion so far for the A380. That government money has shielded Airbus from the same market risks that face Boeing and any other commercial competitor. One of the many benefits of European launch aid is that Airbus isn't required to pay back the loans if the aircraft program is unsuccessful. However, if sales of Boeing's 787s flop, Boeing loses billions and faces the risk of going out of business. If A380 sales falter, Airbus doesn't have to repay the $3.2 billion in loans. John