European aeroplane manufacturer Airbus and Boeing, its US rival, are in a long drawn out war.
They don’t only compete for airlines to buy their planes. For the past decade, they’ve also used the Word Trade Organisation (WTO) as an arena to draw blood.
Round 2: Boeing
Boeing recently won an appeal on a WTO decision that it had received state aid, in the form of tax breaks, for a US production facility.
AIrbus, represented by the EU, claimed that these tax breaks were intended to prevent imports of plane parts. Consequently, this aid was classed as “prohibited” because it aimed to block free trade. The US government, acting for Boeing, argued successfully that this wasn’t the case.
But: “The game is far from over”
That’s what Airbus PR Chief Rainer Ohler had to say.
And he’s right.
The battle for illegal subsidies is set to continue between the due, with more WTO cases pending.
And whilst these 2 are battling it out, they need to watch out for Chinese manufacturer Commercial Aircraft Corporation of China (COMAC). This state owned company is receiving lots of government subsidies and may soon become the biggest threat to both Boeing and Airbus’ existence.