Airbus vs Boeing: The Subsidy Wars



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Code : COM0100

Year :
2005

Industry : Aircrafts and Ship Building

Region : USA Europe

Teaching Note: Not Available

Structured Assignment : Not Available

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Abstract: The competition between Airbus and Boeing has taken a new course in 2005, when both have taken centre stage at the World Trade Organisation (WTO) over the subsidies. The European Union (EU) and the US filed suits with the WTO accusing each other of the subsidies that they have given to Airbus and Boeing respectively. The Airbus-Boeing dispute, pending at the WTO, is a unique trade dispute as neither say that they have not subsidised, instead both parties question the amount the other has provided. Both defend the charges saying that the aeroplane manufacturing is exorbitantly expensive and highly risky, while The Economist maintains that both parties are at fault, as neither of the companies requires subsidies in the first place and capital markets finance far more risky projects.

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Pedagogical Objectives:

  • To discuss the various challenges faced by European economy in the wake of ageing population.


    Keywords : Airbus-Boeing dispute,Government and Business Environment Case Study, International subsidies, subsidy, GATT (General Agreement on Tariffs or Trade) and WTO (World Trade Organisation), Subsidies in large civil aircraft industry, Boeing and Airbus subsidy, Subsidies in US and EU (European Union), Prohibited subsidies at WTO, Government aid to airplane manufacturers, Boeing and Airbus allegations at WTO, Global civil aircraft industry, Subsidies and world trade, Suits at WTO

    Contents :
    Subsidies in EU and USA: A Long Drawn Duel?
    Airbus vs Boeing: The "Subsidy" Wars
    The Road ahead: Free Trade?


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