As far as the monstrosity A380, Airbus themselves has said they need to sell something like 250 of them to be profitable. They have sold only about 125 and the sales seem to have stalled (pun intended). Let's see if the billions in "loans" Airbus was given to build the A380 are ever paid back......
A fair aviation market
Finally, some action toward straightening the skewed global rules.
Wednesday, December 08, 2004 - The Long Beach-built 717, last in a lineage tracing back to aviation icon Donald Douglas, has a tough enough time in the global marketplace without having to face a subsidized competitor. But soon that part of its burden may be lifted.
The Boeing Co. is receiving serious support from Congress and the White House in its efforts to head off still another major subsidy to its formidable competitor, Airbus. The efforts are timely, and a long time coming.
The timeliness relates to the galling fact that Airbus, which has taken $15 billion worth of government subsidies on commercial airliners to help it outsell Boeing, intends to ask for another billion to launch still another plane.
The next subsidized effort from Airbus would be designed to compete directly with Boeing's newest project, the fuel-efficient 7E7, known as the Dreamliner. If launched, Airbus' next effort would come before the company's costliest project, the two-level superjumbo A-380, even gets off the ground.
For years, Airbus has been passing off government subsidies as just a little help in the form of repayable loans to get up and running. But that line never really flew, and it fell dead flat when Airbus overtook Boeing a year ago to become No. 1 in sales.
Boeing admittedly didn't make much of a fuss early on, at least partly because Airbus was picking up market share mostly from McDonnell Douglas, a competitor then but now a part of Boeing.
The market looks a whole lot different than it did in 1992, when the United States and the European Union agreed to a settlement that put limits on subsidies but still allowed European governments to lend money to Airbus at low rates. In the last decade, Boeing has produced one new aircraft while Airbus has produced five.
That must not continue. A private company on its own can't come up with that kind of capital, much less go up against a competitor that uses taxpayers to raise its capital and lower its risks.
Airbus has always whined that Boeing gets indirect subsidies in the form of defense contracts, when in fact Airbus now has more defense business than Boeing; that Boeing got tax breaks from the state of Washington and others, when in fact Airbus and its suppliers are eligible for the same kind of breaks; and that the U.S. foreign sales corporations law (FSC) benefits Boeing when in fact Airbus has like benefits from exemptions to the European value added tax.
In any case, the White House is pushing Congress to get rid of the FSC, as required by a World Trade Organization ruling. That would eliminate Airbus' last feeble excuse for continuing to benefit from stretched-out, low-interest, forgivable loans that give it an insurmountable advantage.
Building and selling commercial airplanes is a tough business, as Long Beach's example of the 717 illustrates. That plane, though based on a platform from a Douglas line that now is extinct, is an engineer's dream of lean construction costs and operating efficiencies. And still it struggles to find a market.
It is only right, for all manufacturers, that the marketplace be made fair.
I never compared either, and never denied Airbus is subsidized.
The way I view Airbus is that if their Governments over there want to subsidize my airline ticket, then fine.
It's a model that hurts the Euros and their subjects, which I neither love nor particularly care about, not me.
Competition is good, even if it is subsidized.
And the project is already more than a billion dollars over budget. I don't think the future of passenger travel is in large 500+ seat aiplanes.