New airlines are taking a hit while no longer expanding fleets. This is because one of the biggest things hit economically during the global economic downturn was airline travel. Boosting the bottom line is something many aircraft manufacturers are focused on right now which may mean the corporations have to take large subsidies from the government. Reuters reports that World Trade Organization (WTO) judges ruled Boeing, the storied American airline manufacturer, received government subsidies that given the manufacturer an unfair competitive advantage over European competitor Airbus. The $20 billion in subsidies is being challenged by the European Union, as outlined by sources.
WTO points out what’s going on with Boeing and Airbus
It is said that the World Trade Organization ruling against Boeing is confidential. It will not be released to the public until sometime in 2011. Of course, United States of America and European officials have received the statement. Some of the findings within the case have been appealed already. The appeal originated from both Boeing and Airbus. Reuters suggests that if first reports of the WTO ruling are accurate, a negotiated settlement between Boeing and Airbus may occur, as the current state of relations in transatlantic aerospace travel is cold at best. The EU gave a cash advance as a government subsidy to Airbus in June 2010.
Research contracts, tax breaks and sour grapes
It is like we are playing with children. One kid seems upset that another kid is trying to do what he got in trouble for a few days ago. According to European sources, Boeing took $17 billion in research contracts from NASA and also the Pentagon, and enjoyed $4 billion in tax breaks from the corporation’s home state of Washington. Even though technically there is no rule about accepting government aid, the World Trade Organization said international trade laws were busted when accepting the tax breaks and government contracts. Airbus was glad that it could get Boeing in trouble for what it was doing. Thus, Boeing felt their actions in accepting government subsidies were acceptable.
Getting President Obama to help
The feud between Boeing and Airbus might only be solved with “negotiations at the highest political level,” according to EU trade spokesman John Clancy who talked to Reuters. U.S. officials have claimed they won’t come to the table until the EU no longer subsidizes the production of the Airbus A350. The United States of America thinks that what the WTO ruled against is the exact same thing the EU is doing. Boeing said that Airbus is doing every little thing wrong with the EU although Boeing is doing nothing to harmed the transatlantic aerospace market.
Additional reading
Airbus
airbus.com/
Boeing
boeing.com
Reuters
reuters.com/article/idUSTRE68E47T20100915
WTO and Boeing have had better days
youtube.com/watch?v=50fqfmWbXiY
