European Governments
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U.S. dominance. Since 1981, however, Airbus has confounded its critics by progressively gaining market share” (p.302). Even though Airbus was a combination British, French, German and Spanish the Airbus market continue to grow as a powerful competitor against Boeing. Compared to Boeing Airbus was not even suppose to be a factor until the threat of their market share continue to rise in the aircraft industry which Boeing could no longer ignore.
I believe the four European governments form together to help Airbus to gain leverage against Boeing. This would allow them to increase their contract orders to strengthen their own company as number one. These two conglomerates battled for decades in trying to gain the upper hand in the aircraft industry. Boeing was trying to maintain it status but had lost its number one position to Airbus. Since then it has been a political battle from both sides.
The disputes kept the competition from being a monopoly on both sides. Clark (2012) states, “The European Commission, the E.U. executive, said it was seeking the sanctions to compensate for the impact of illegal subsidies to Boeing that it said gave Boeing an unfair advantage over its European archrival, Airbus” (
The 1992 trade agreement was effective to a certain degree when limiting the subsidies of percentages to be repaid over a 17 year period. The United States politicians were caution to reopen the case against Airbus because the two American manufacturers that supplied their engines were Pratt& Whitney and General Electric. The alleged allocations against Airbus would not be worth the risk for the American manufacturers.
Airbus agreed to the merger of Boeing and McDonnell Douglas at first but soon realize that it was not in their best interest to allow it. The merger cause conflict with the Airbus Company in fear of a structural hold within the market would cause a monopoly of servicing and making spare parts for future airplanes. The EU declared that the merger was illegal in fear that it would affect competition in Europe.
Had EU officials allow this merger to