In: Business and Management

Submitted By ardila
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Boeing versus Airbus: The ‘endless’ crusade for continuation of subsidy!

(A case study)

Case reviewer: Angelica Sharma*

Brought up in a family in which my parents were always ready to help anyone, closely or even remotely related to them, but not without being duly satisfied about the urgency, righteousness / desirability of assistance (mostly financial) that was asked for, I have, overtime, come to view non-market incentives like subsidies, grants and tariffs from a mind-set that I have found moulded in their company. I look upon my parents as really great protagonists of market-economy without undermining their sense of sympathy and concern for the hapless lot around them in that country, they proudly refer to as India. They always made a distinction between who deserved and who did not deserve the favour that has been asked for. And also, they were particular to find out when, in what form, how much and for how long the assistance, if any, was to be there. Strangely, even to day, they remorsefully recall the few instances of having wasted their scarce productive resources on individuals who, they later-on found, never wanted to be on their own. But they did learn a lesson from these experiences. I have grown in such family environment of respect for merit, hard work and self-pride. It is endowed with this sense that I intend to ponder over the Boeing-Airbus subsidy-related trade-rift and comment on the perceptions, policies, arguments and counter-arguments of the two sides and their respective governments in respect of the basic issues inherent in this controversy. Let me first summarily describe the facts of this dispute, and the classical dichotomous roles of the governments, on the two sides.
History of trade dispute between Boeing and Airbus: An overview
Until 1980, US commercial aircraft industry enjoyed a de facto monopolistic position in the…...

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