Plane makers fight jet export subsidies
TEXT OF STORY
Kai Ryssdal: A David and Goliath story for you now, via the commercial aviation industry. This one has a twist, though. Two Goliaths against one David. From Washington, Marketplace’s John Dimsdale reports.
JOHN DIMSDALE: In one corner are the world’s biggest jet plane makers, Europe’s Airbus and Boeing of the U.S. These fierce competitors have become allies to keep a Canadian newcomer from cutting into their sales of smaller jets. Bombardier has plans to market a 150-seat jet, one that would compete directly with Boeing and Airbus.
Boeing’s John Kvasnosky says Canada is unfairly underwriting Bombardier’s small jet with export subsidies.
JOHN KVASNOSKY: Both Airbus and Boeing share the fact that it is being offered as a competitor to large airplane products and thus, should be subject to the same fee structure for large airplanes.
But unfair government subsidies are the complaint that Airbus and Boeing usually throw at each other, says University of Portland professor Richard Gritta.
RICHARD GRITTA: That to me is the pot calling the kettle black. When it benefits Boeing or it benefits Airbus, they kinda say well, it’s OK. But now they’re seeing somebody else try it against them, and they don’t like it.
Boeing and Airbus are working on a new international agreement to limit government support for aircraft exports.
The Teal Group’s Richard Aboulafia says they have to act fast because other competitors aren’t far behind.
RICHARD ABOULAFIA: I think there’s a real fear at Airbus and Boeing that if Canada can basically get government support to enter their turf, then so can Russia, China and whoever else wants to play there too.
Smaller jets are more efficient and safer than the turboprop planes regional carriers use now. Analysts forecast a 40 percent increase in demand over the next decade.
In Washington, I’m John Dimsdale for Marketplace.
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