CSeries unites Airbus, Boeing

Airbus and Boeing are bitter rivals when it comes to government support for their respective airplane programs but they are united when it comes to the proposed funding for Bombardier’s CSeries, according to this article in The Wall Street Journal.

Bombardier proposes to have government funding of various kinds up to 33% of the R&D cost for its 110-130 seat CSeries. The 130-seat version is squarely across from the Airbus A319 and the Boeing 737-700. There are reports that Bombardier is now considering a 150-seat version as well, which is directly competitive to the A320 and 737-800.

Airbus and Boeing oppose the funding scheme for the new jets. (The irony with respect to the Airbus position is duly noted.)

Airbus has also questioned how China is funding the proposed COMAC C919 150-200 seat jet, which looks remarkably like the A320. Boeing, as far as we know, has yet to weigh in on this one.

7 Comments on “CSeries unites Airbus, Boeing

  1. Scott, everybody in this is sitting behind glas walls
    mandating care when throwing stones at others.
    ( and if it is not government money it is government foreign relations pressuring )

    apropos pressure:
    the recent bout of articles are missing out a bit
    on impartiality, formerly the core value of this blog.
    Some patriotic pressure?

    • Not sure what you mean on the last part of your comment. No pressure from anyone. We get accused of being anti-Boeing. Now we’re accused of being anti-Airbus. Sounds impartial to us. We call ’em like we see ’em.

      • touche 😉
        being burned evenly from both sides certainly
        can be seen as a visible measure of impartiality.

  2. To be fair, Boeing and Airbus’s complaint is a specific one: Bombardier is taking advantage of an export credit subsidy that is only allowable for regional jets and not permitted to Boeing and Airbus. If the CSeries competes with the A320 and B737 families then the subsidy should be available to all or none.

    • Going by the WSJ article this is creditor protection
      similar to the German “Hermes Cover”.
      http://en.wikipedia.org/wiki/Hermes_cover
      Riskdistribution provided by the Canadian Gov. for
      Canadian Manufacturers.
      Now neither Boeing nor Airbus produce in Canada.
      so : no service, sorry.

      How do the US Export-Import Bank services as
      used by Boeing compare here?
      My impression was that ExIm was very busy last
      year.
      Airbus will have used similar services for every third
      plane sold in 2009 ( afaiu ) :
      http://www.faz.net/s/Rub58241E4DF1B149538ABC24D0E82A6266/Doc~E8E029B58F5984A81B93A239B23E4617D~ATpl~Ecommon~Scontent.html

      • Airbus and Boeing’s argument is that Bombardier is planning to access subsidies that are formally barred to them. It’s irrelevant if similar subsidies are available to all: If the generally available ones are so good why doesn’t Bombardier just go for those?

        The main point is that all subsidies distort the competition by making planes cheaper than they would otherwise be. All manufacturers want to have them. But new entrants benefit from subsidies more than the incumbents, ie Airbus and Boeing. In principle it’s in the incumbents’ interest to restrict subsidies, as long as they can hang onto the ones they have. Or in Boeing’s case, pretend theirs don’t count.

  3. It’s a particularly bad example because the market’s reaction to the design hasn’t resulted in a whole lot of firm orders to make lenders comfortable with the financing requirements. Without the government subsidy, it’s hard to see this program moving ahead.

    The push for a 150-seat variant could indicate that the 130-seat model is too big for the regional market and just too small to compete with the narrowbodies.

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