The rivalry between large civil aircraft (LCA) manufacturers Airbus in Toulouse, France, and The Boeing Company in Seattle, Washington, spans three decades—only now, though, is it getting particularly heated (and even ugly). The latest conflict centers on the legality of government subsidies and loans enjoyed by both parties.
On 12 March 2012, the World Trade Organization (WTO) Appellate Body released its findings following an investigation, prompted by the European communities, into whether U.S. large commercial aircraft (LCA) manufacturers were being illegally subsidized.
Boeing had previously accused European Union LCA manufacturers, including Airbus, of accepting illegal subsidies and, thereby, gaining an unfair advantage and causing Boeing to lose business. The WTO’s investigation found that, in fact, Airbus had accepted $18 billion in questionable government loans.
The EU retaliated, requesting that the WTO investigate government subsidies received by U.S. LCA companies, including Boeing. This month, the WTO Appellate Body released its findings, not only affirming the illegality of the subsidies provided by the U.S. government and U.S. military to Boeing, but also affirming the legality of Airbus’ EU loan repayment.
The controversial findings made global headlines and social media outlets were a hotbed of activity. Airbus and Boeing brought their battle to Twitter, which was flooded with statements from both companies. Both companies claimed victory in the latest WTO finding. The Airbus Twitter handle (@Airbus) even produced a few memorable jabs, calling the Boeing 787 Dreamliner the “7-aid-7”.
The WTO is the only global international organization dealing with the rules of trade between nations, according to a spokesperson. “At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.”
In light of this recent WTO finding and the battle that continues to rage between Airbus and Boeing, this geek thought it was high time to do a blog series taking a closer look at these two aircraft-manufacturing behemoths.