Also, sales of the venerable B747 had been declining for years so I do not believe it was the “cash cow” for Boeing many claim.

Regarding the blog, I agree….Airbus not only gets launch aid, but it also gets all of the other breaks which Boeing enjoys and many either don’t know that or conveniently leave that out…

Some random points:

1. Notwithstanding AB’s claims that the US has subidized BA with lucrative gov’t contracts, BA has not won on its own a major contract for a new airplane since the B52/KC-135 produciton ended in the early ’60s. BA has lost the F-111, C-141, C-5, JTSF, and X-45 UCAV, and maybe others I have forgotten. Thus, it may have been that BA used its B-47/B-52/KC-135 profits to fund the original 707, which turned out to be expensive because BA decided to build the a 707 fuselage entirely different from the KC-135’s, mainly wide enough for 6 abreast in coach. But after that, BA had no such contracts to “subsidize” the 737, 747 and beyond.

2. Most contracts BA has won (or lost) are the result of vicious competition. That is going on right now with the tanker and S&R helicopter (Chinook variation). It looks now like the latter will be completely re-bid so the winner will have gone thru at least two excruciating bidding processes to get the contract.

3. This bidding process should result in the winner’s reaping fair profits for the work done. Not even AB is claiming that fair profits are subsidies. The problem is that contract winners historically have low-balled their initial bids and then won cost overrun payments once the project is in process and it would cost huge amounts to cancel and go elsewhere. AB may have a point that the doubling and tripling or worse of these contracts are really subsidies. But to prove that AB must establish that the contracts or price increases are essenially corrupt; ie., that the contract process has no legitimate function except to give the contractor unfair profits for the purpose of making sure they can wipe out AB/EADS competition. To me it seems to turn on what is a fair profit, something reasonable people can certainly disagree over, including particularly very high priced expert witnesses.

4. The “fair profit” concept is becoming more and more relevant to WTO case as AB/EADS begins to win Pentagon contracts; ie., the Army scout helo and Marine One to name two. We can all guess what AB’s position of “fair profits” will be if it wins any part of the tanker contract. AB’s offer to settle now may reflect a fear that if it wins that contract it will lose the overall WTO case.

5. Has it raised question marks with anyone, as it has with me, that BA never really objected to launch aid for the 380, but is now doing so at great expense re the 350? I have always had a sense that BA has been manipulating AB for years for at least two reasons. First, in the ’80s and ’90s to protect the 747 by negociating for years with AB for construction jointly of a jumbo/super jumbo 747 replacement some time in the future. I doubt BA ever intented to build such an aircraft. What they wanted was the opposite; to keep AB talking as long as possible to preserve their 747 jumbo monopoly on which they made lots of money, not replace it. Maybe BA in these years-long negociations even planted the idea with AB that they should build a super jumbo.

In any case, the A380 has been a god send for BA because (1)it is being built for a very small market so AB is not likely to make lots of money on it and there is no need for BA to spend lots on a compeititor.

(2) The A380 does not challenge the 747 so BA can afford to make inexpensive improvements to that aircraft and continue to sell it at a profit even at low prices that may mean the the 747 undercuts the A380’s already small market.

(3) Most important and obvious of all, AB’s commitment to the A380 has resulted directly in its inability to offer a viable competitor in the most important market of all, the medium twin-asile segment, before 2016. I say 2016 and not 2013, the year AB says it will deliver the first A350, because AB will not be producing enough of them to matter until 2016 when it hopes to be making 13 planes per month. By that time BA will likely have been producing 10-16 787s per month from at least 2013. Thus AB’s A350 delays have given BA all time it will need to iron out its current and even future production problems with the 787 so that by 2016 they sould be really cooking.

And so BA never objected to A380 launch aid because they wanted AB to step into the engineering quick sand of building a huge airplane, something BA knew a lot about in the early ’90s but AB did not.

WRT the WTO’s pending decision(s), I sincerely both Boeing and EADS can sit down and hammer out a compromise before these bureaucrats have to rule. Not that they (i.e., the WTO) want to; I suspect that the WTO would rather crawl around for a few hours on ground glass than have to wade into this mess. After all, there is likely to be a winner and a loser and the loser isn’t going to be happy. This could ultimately threaten the WTO itself (and those cushy jobs–just like having a UN job….) and possibly instigate a trade war.

Interestingly enough, Canada joined the fray. Seems they objected the what the EU was calling a “subsidy”. This could threaten their own subsidies to Bombardier!

Yes, the KC-30 is caught up in this mess as well. So Airbus is proposing a tanker that started life as a subsidized commercial aircraft, will build it in Toulouse, and package it as a “mostly American built” product? How much kool aid will the USAF need to swallow this argument? And even if they are dumb enough to select this thing, I seriously doubt the U.S. Congress will fund it. Tactical considerations aside, this is a military project where political and defense infrastructure concerns are legitimate considerations. Just look at the A400M and Galileo for reference points.