Pontifications: EADS went ahead with tanker bid despite long odds against winning

Third in a Series

By Scott Hamilton

Dec. 20, 2021, © Leeham News: When EADS, then the name of the parent of Airbus, decided to go it alone and bid for the US Air Force contract for the KC-X aerial refueling tanker, officials knew it was an uphill battle.

Despite winning the contract in Round Two, with Northrop Grumman as the lead, the parameters of the competition changed. No longer would the A330-200-based tanker get credit for its greater capabilities that won it the contract in Round Two. Now, the ancient Boeing KC-135 was the baseline to meet. Any bidders—Boeing and EADS—would receive only a pass-fail rating for meeting the baseline.

If the bid price was within 1% of each other, then EADS would receive credit for the extra capacity afforded the A330 tanker over Boeing’s KC-767 offer.

The pass-fail approach caused Northrop to take one look at decide to withdraw from the competition. EADS officials made the decision to proceed anyway, knowing now that winning was unlikely.

What are the odds?

Sean O’Keefe

“My bet was on the day we made the decision to compete for that the odds were probably one in five,” recalls Sean O’Keefe, then the president of EADS North America. O’Keefe had been administrator of NASA and he knew the Pentagon processes well. Defense Secretary Bob Gates was a friend.

“By the time we were done with it, the actual proposal, I confidently shifted my own thinking to say, ‘It’s probably more like one in three.’ We’ve really reduced the risk that much and made it that much more competitive a proposal going forward,” O’Keefe said. “Is this a certainty? No. Is it worth taking a trip on this? Why not?”

Extraneous factors concerning the production rate ramp-up of the A320 were described in Part 2 of this series.

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“That was one of the other things we valued. We thought, ‘Okay, what’s the risk here?’” O’Keefe told LNA. “At the end of the day, the risk is three to one. It’s not going to be terrific in terms of winning it, but boy, all the work you’d have to do to do for either the 320 line or Mobile or this for KC-45 was similar. It wasn’t the same by any means, but it was very, very similar.

“We’re marching down towards doing this anyway. How we actually spread the capital expenses and all and that kind of stuff is something we’ve got time as this plays out to figure out how to do that and what exactly that would take.”

Heated Competition

The competition between Boeing and Northrop Grumman in Round Two and with EADS in Round Three was bitter, so bitter that Defense Secretary Gates criticized everybody in his memoir, Duty. But O’Keefe said it was nothing unexpected.

“There are a lot of things that could have been, might have been done differently. I frankly didn’t find that competition to be anywhere near as onerous or unexpected as what would have been expected, with all due respect to your profession. The competition between Airbus and Boeing on commercial airplanes has never been something for the light of heart, either. This was hardly unexpected, and it wasn’t something that surprised me,” O’Keefe said.

Already some of the past tactics have been unveiled. A Kansas state senator wrote an Op-Ed playing the Buy American card on Boeing’s behalf, calling the A330 a European airplane despite its large US content and Lockheed’s pledge to assemble the aircraft in the USA. The tired, old illegal subsidy card also has been rolled out.

“It was not an unexpected campaign tactic the last time,” O’Keefe said. “I think you’d have to ask Boeing what their intent is in terms of how they intend to run it this time. I think that the players in this exercise, Lockheed Martin and Airbus, are now fully prepared to deal with that. They’ve got to be quite cognizant of the fact that that’s exactly the way it may yet be run again. That wasn’t a surprise.


“This was tough stuff. It was bare-knuckle. But that’s exactly the same way to running commercial campaigns. That’s exactly the same technique that Boeing used on many of the US air carriers as to why it was they stayed with Boeing. Frankly, American, United, Delta, at that time, USAir, all made different decisions, which earned them lots of criticism by Boeing, but that was not an unknown characteristic and tactic that really played into the game,” O’Keefe said.

Part 4 picks up on Jan. 3, 2022, following the Christmas-New Year’s holidays. Boeing is now the incumbent supplier to the USAF. But its contract performance has been dismal. Airbus’ A330 MRTT has won nearly all sales outside the US. Will this make a difference to the USAF?

Read about the bitter tanker competition in Air Wars

My book, Air Wars, The Global Combat Between Airbus and Boeing, recounts the bitter battle between Airbus and Boeing to win the contract for the Air Force’s KC-X aerial refueling tanker. It also goes into the ramifications of the original tanker scandal at Boeing and subsequent impacts on other aspects at Boeing Commercial Airplanes. Some excerpts:

The idea of Airbus supplying the USAF with such a high-profile airplane, especially in lieu of Boeing, amounted to blasphemy among some U.S. elected officials, Boeing employees, and even some persons in the Armed Services. Airbus came from nowhere in 1974 to capture 50 percent of the mainline commercial airplane market by 2005. McDonnell Douglas not only had exited the commercial airplane market but was now part of Boeing. Many blamed Airbus’s success on government subsidies, complaining that Boeing didn’t get any and was disadvantaged as a result.

There is no doubt that Airbus had government support. The French, German and Spanish governments invested heavily in Airbus, subsidizing early programs. But many European aircraft programs since World War II had significant government support. Still, they were commercial disasters. The Concorde is probably the prime example.

In 2004, the U.S. renounced the 1994 trade agreement governing subsidies to commercial airplane development, and the U.S. Trade Representative, at Boeing’s behest, filed a complaint with the WTO, charging that Airbus received illegal subsidies.

There are those in many circles who believe Boeing initiated the complaint to divert attention from its tanker scandal. Airbus and its parent, EADS as it was then known, were and are firmly convinced this was the case. Only Boeing principals know whether this was the motive, but it doesn’t matter: The subsidies truly were considered unfair competition by Boeing, and officials were determined to put an end to them.

Boeing’s parallel strategy was clearly to tarnish Airbus in the coming tanker competition. Without turning this into a detailed examination of the subsidy issue, Boeing certainly succeeded in Congress in ripping Airbus to shreds. Over at the USAF, however, there were other dynamics involved.

59 Comments on “Pontifications: EADS went ahead with tanker bid despite long odds against winning

  1. With the development of hypersonic missiles (which can’t be detected/neutralized in a timely manner), it’s becoming clear that the nature of warfare is changing. Various anti-satellite systems are also being developed by several countries (including India). Military brass are already pointing out that you don’t have to try to shoot down fast fighters when, instead, you can just shoot down their much larger and slower support tanker, thus starving the fighters of fuel. And a single hypersonic missile with a tactical nuclear warhead can take out a whole fleet before it ever manages to launch an aircraft.

    Having fleets of fighters and large numbers of tankers may be fine for relatively small tactical operations, but it increasingly appears like a defunct concept for large strategic wars against sophisticated adversaries.

    At the very least, military brass are asking whether a stealth tanker would be a prudent development.


    • Protracted conflict is used to keep small fry down.
      You don’t need stealth tankers for repeatedly blowing up groups of civilians.

      A direct clash between primary adversaries will be a “big short bang” match up.
      You don’t need tankers of any sort because they probably don’t have a place in it.

  2. Interesting stories. As I recall, a large part of your blog when you started (back when?) was about the Airbus/Boeing competition for the US Airforce tanker replacement. Just shows how long this saga has been running!

  3. No need to even guesstimate the amount of government support Boeing received over the decades in tax cuts, NASA research, ExIm Bank, political support and hundreds of billions in fat development, defense & space contracts. I guess everyone can see. Politics and Boeing are intertwined in a dozen ways. Denying is facilitating.

    Personally I would be ok if Boeing gets the next tanker contract if it really leads to change, renewal and long term added value. That just doesn’t seem to be part of the current system. Calhoun was and is part of the system of promising, cashing for a few years and a warm good-bye party with the other beneficiaries.


    A cultural change takes years, I feel a team of credible external hard nosed professionals (& lawyers unfortunately..) would be needed to change. From the top. The current old boys network / system won’t really change. Many just float on past assumptions, accomplishments and believes.

    • And the US will continue to have a steady supply of lemons. That’s the unavoidable outcome of too-big-to-fail treatment.

      • keesje:

        Why is Ariananespace, Typhoon, Rafael, Tiger, NH-90, A400 and the secret aircraft launch contract, so called Clean Skys etc fine and wondrous in the EU and how the US does its procurement’s a hand out? Let alone all of it a hand out to Boeing?

        I worked with a guy who could pin point peoples faults to a T, he never applied it to himself of which (like all of us) he had many.

        One individual told me one day, you go home every night patting yourself on the back as to how good you are (and yes I was good, brilliant, no, good, yes)

        I told him, not I go home every night and go over the mistakes I made that day. Being right just tells me I know what I was doing on that particular aspect. My mistakes tell me I need to learn from them.

        Its always a good idea to look in the mirror and ask yourself questions.

        • “Its always a good idea to look in the mirror and ask yourself questions.”

          Yes, indeed, you should do that urgently 😏

        • By definition military contracts are government supported.

          Just as the SST Boeing 2707 was , and when congress cut federal funding t so was the development… with much wailing over the so called ‘60,000 jobs lost’

          • Duke:

            The US SST was clearly a US Government funding of a so called commercial aviation project. Its a rare occurrence int he US

            But the constant EU types harping on Boeing and refusing to admit what occurs over there? Yea, pure hypochondriac (or worse)

            So lets see, there is Lockheed , Martin (now merged), Hughs, Ratheon, United Tech (now merged) Northrop, Grumman (now merged) ad nausea who got government contracts.

            Why no mention of them? Because its one of the two world wide aircraft companies that came into its own sans a Government creation aka Airbus? Do you feel guilty? Don;t want to face the reality that the EU is the same if in different ways?

          • Military contracts arent part of WTO rules about ‘trade’ in airliners

            Why are you keeping bring up these irrelevant contracts which are government procurements.
            The US Military can favour its purchase of Gulfstreams over Dassaults all it likes, same goes for Raytheons specialised military equipment

          • Actually Duke-when the 2707 was cancelled- due to the odd arrangement of govt funding of only certain items related to the program- several years later it came out that BA did NOT lose any significant amount of money overall. yes many thousznd lost their jobs but at the same time the 737 and the 747 were aborning.

            I wuz there on 2707, got laid off – went to texas LTV- then to Rockwell B1-then back to Boeing in 74. And many other weird things happened. Certain major items were developed and certain people on the 2707 were transferred to Commercial and later patented . Had they been patented under 2707 program, Govt would have had rights.

          • @Dukeofurl and @Transworld. Why are the EU and US fighting over trivial trade issues while being open to Chinese imports that are completely protected by a mixture of subsidies, compulsory joint ventures that transfer key technology from the EU and US to China, currency controls and invisible barriers. Seems stupid to me.

          • profits!
            China stuff generates more profits in the US and EU.

            ( compare ex factory pricing for US/EU products vs CN stuff: at least a magnitude difference. But consumer prices are lower but in the same domain. . quality: you get what _the manufacturer_ gets paid for 🙂

  4. Airbus still wins if it enters the competition and keeps BA honest on pricing.

    If I’m not mistaken, Boeing has not made a dollar on the previous 767 tanker contract. With wins like that…

      • Frank:

        Is that not what the so called competition was and is all about?

        It was a pure price shoot out and Boeing took it, left a lot of money on the table (contract term for under bid too much)(

        Reality is you really cannot have a competition with two aircraft that are so different in size and capability.

        But if capability was the issue then we would have a 777/747 or A380 tanker.

        • Thats the point . They are very similar in capability
          eg 767F freighter is 67 tonnes max payload
          A330-200F is 70 tonnes max payload
          This idea that its ‘so much bigger’ is strange

          • Duke:

            We are talking the KC-46 vs the A330MRT.

            The A330MRT is bigger, hauls more fuel and overall cargo (though not on the main deck).

            At least use the same tanker to tanker data.

          • The A330MRRT has less payload than the A330F

            ‘The A330 MRTT can carry a maximum payload of up to 45 tonnes, as its not a ‘freight standard main deck’ – but which can added of course

            The maximum fuel capacity of A330MRRT is 111 tonnes, ( says Airbus) while KC-46 is 96 tonnes ( from USAF fact sheets).

            Much of that is used for the planes own engines during its mission.

            The A330MRRT is not much bigger at all. Actual tanker figures confirm the rough estimates from the civilian cargo version comparison

          • The LM XT tanket will carry 123T of fuel.

            Adcsdditional cost the A330 based tanker can have a big cargo door to add main deck F capabiliy, and can carry 300 passengers. It’s a bigger aircraft with more capability and flexibility.

            For the KC-X, politics moved the goalpost after NG/ Airbus won and they knew exactly what was offered by Airbus & Boeing. Then everybody went into denial mode & even used the word “fair” . The ROW chuckled & ordered the MRTT.

          • @keesje

            The official fuel load by Lockheed would suggest an A330neo. It’s about 12 t more than for current A330MRTT but MTOW jumped only by 9 t from A330 then at 233 t to now 242 t. A330neo’s MTOW is 251 t. That’s a difference of 18 t but engines are heavier.

            Lockheed uses the term “airframe” to describe that there is an already certified aircraft for refueling US aircraft: F-35A, F-22, F-16, A-10, B1-B, C-17, E-3, E-7, F-15, P-8A.

          • “Much of that is used for the planes own engines during its mission.”

            In MTOW regime both frames derate payload by slightly more than 1.05t/100nm. ( a rather simple but telling metric, actually.)
            A330 can carry more payload further out to begin with.
            Obviously it is the more efficient frame.

  5. Just a bit of navel gazing and speculation re’ bigger tanker’ 5 to 10 years before possible ‘first flight ‘ of KC-Y.

    Part of Everett faciity will be used to build 767 tankers and a few oddball versions for about a decade or more.
    Part of Facility may be used to build some version of 777x

    Still leaves a big part of Everett Facility empty re hangar space to fit large aircraft

    Major sized Autocalaves still there- not that much demand for large pizza.

    Major facility for making large CFRP machines next door ( ElectroImpact)

    U.S needs to keep such composite tech and large autoclaves and related final assembly capability and certain suppliers in business- no matter what

    Care to bet on ‘ winner’ of KCY ? Can you spell MIC ?

    • Are you giving hints?
      – Does it begin with “B”?
      – It is up to its teeth in debt?
      – Is it currently delivering zero widebody passenger aircraft?
      – Did a high-ranking USAF officer call its recent tanker a lemon?
      – Does it have a non-functioning new rocket?

      If 5x “yes”, then we have an idea who it might be…;-)

      • AAAAmazing guess – Give that person our largest sized stuffed koala bear with a blue and white cap, and two tickets to next years production of ‘ Can you believe this ‘

        777 Trombones will lead the big parade, with 150 congresstypes with open hands
        Thundering, clapping louder than before . . . .

    • Has to be an ‘in production tanker airlifter’
      Rules out a new development version of 777X

      • “Known also as Bridge Tanker, the KC-Y requirement is for a commercially derived aerial refuelling aircraft to supplement the USAF’s fleet once deliveries of the Boeing KC-46A Pegasus are complete at the end of the decade.”

        And commercially derived 777 such as a cargo version ?

        In November 2013, Boeing announced the 777X development with the -8 and -9 variants, both featuring composite wings with folding wingtips and General Electric GE9X engines. ..

        In November 2013, with orders and commitments totaling 259 aircraft from Lufthansa, Emirates, Qatar Airways, and Etihad Airways, Boeing formally launched the 777X program, the third generation of the 777 (not to be confused with the 777-X variants, the -200LR and -300ER, which are the second generation of the aircraft), with two models: the 777-8 and 777-9.

        • While the KC-777 is not going to happen, in point of fact the KC-46A is non developmental and the A330MRT would be as its never met those same specs.

          And yes, the KC-46A has a serious deficiency in the Boom vision system, that is going to be resolved a a few years and there is an interim fix in the works being applied next year.

          Overall the A330MRT would be a developmental project. But they are expanding the definition to get competition.

          Reality is they should just extend the KC-46A contract (yes it can be done) and get it over with and save everyone a lot of spinning around.

          Cost wise the existing contract is a really good deal.

  6. With Boeing being the incumbent supplier of tankers with a by then ready product and a running production, it is very unlikely that Airbus has
    chances in the tanker competition. Despite all the screw-ups, the Boeing offer comes with less technological and production risk.
    But denying Boeing significant profits can still make partaking worthwhile for Airbus. The competition pushed Boeing to bid below their actual cost during the first competition.

    • But without a competition BA would pretty much be able to charge what it liked for any extension to the KC-46A to fulfil a Bridge Tanker requirement.

      Given that BA are not going to just agree to the same terms to produce more KC-46A for a Bridge Tanker deal, a competition is the obvious outcome.

      Do I think there’s any way that LM / AIRBUS will win a competition against the KC-46A, despite it being a good idea to not have all your eggs in one basket? NO, as long as BA don’t do anything really crazy, I think it’s theirs to lose.

      Would Airbus actually want to win a Bridge Tanker requirement? In military strategy it’s most often better to wound enemy soldiers than to kill them outright. Keep BA using part of it’s workforce, and facilities producing 767 based tankers for not very much profit, keep them from clearing the decks, and starting afresh with something more revolutionary, keep them distracted.

  7. Winning?:

    Total difference between winning and award which was over-ruled by the GAO as USAF did not adhere to the RFP.

    In Military contract terms it was deemed to have busted the bid by so much as to have affected the contract. Its rare for the GAO to over turn, they often will comment on contracts that drifted off course.

    The difference is that they assess the contract award vs the RFP and if there are enough violations they over turn it.

    • Yes, R#b, thank you…we’ve heard it all before 😏

      Mind you, I doubt that the USAF would agree with your stance…buy they’re hardly of any importance, are they?

      • And you will hear it again and again and again.

        The only way to kill Urban legends is to disprove them.

    • Supreme Court has since ruled – in a different case- that legislative branch office rulings are not binding on the executive branch. The GAO is an agent of Congress.
      However they could pass legislation in the Defence Policy Bill that prevents the military from going against a specific plane that was ruled out

      • The GAO is like the NTSB, it makes recommendation, the USAF in that case did not have to follow it.

        As a rule they do.

        If they don’t then Boeing in this case could take it to court and win. The USAF did not want it tied up just to wind up with the KC-46 anyway.

        Unfortunately people on the other side of the pond like to pontificate but they don’t understand the US system. I try to keep it simple for them!

        The point about the co worker was he was great at pointing out others problems, he just did not apply it to himself.

  8. There is no reason that US taxpayers money ends up in heavily subsidised and governement suppoter France-German-Spain Airbus.

    Keep in mind that every single military and parapublic aircraft procurements in France, Germany and Spain is done without any RFP, which means without any competition from US OEM.

    • Which is why France just bought C-130Js, Germany a few dozen F18s and Spain will likely select F35B for its carriers??

      • JCM:

        That is because there is not a bloat EU program that makes stuff like that.

        Well the F/A-18 is because there are no nuke capable aircraft (Typhoon was never certified) and Germany has a NATO obligation for nuke capable fighters.

        F-35B is the only STOL aircraft that can operate off a Spanish Carrier.

        Germany bought the P-8 because there is no EU aircraft remotely like it.

        France bought C-130 because they found out the A400 was too big for a lot of missions.

        • On the basis of such argumentation: the USAF should have bought the A330 MRTT, because there is no US equivalent.

          Instead, the nationalist card was played, and a lemon was purchased.

    • Not everything in life is purchased via (rigged) RFPs.
      Does the US issue RFPs for naval vessels? How about missiles?
      Did Australia issue a new RFP for its nuke subs, or did it just buy whatever the US/UK were offering it?

      And if the “special requirements” of the USAF play a role, then stop pretending to be considering foreign suppliers and just issue a domestic tender.

      • Well that is a crock.

        Maybe you should look at the EU and its overpriced and no functioning kit?

    • @Philippe Cauchi

      Why are you so concerned about “US taxpayers”?

      Aren’t you a citizen of Canada?

      Or is the real story here that you just hate some European nations so much (e.g. WW2-related?) that it is clouding your judgment on anything related to Airbus?

      • Indeed.
        And reciprocally, we could ask why Canadian taxpayers should put up with funding the proposed purchase of F35 lemons from a country that:
        – Tried to kill the Bombardier C-series;
        – Unilaterally trashed NAFTA.

        Once the nationalist book is opened, others can add their own chapters.

        • Bryce:

          As usual, totally uninformed.

          Earth to Bryce, Canada is a participant in the F-35 from the git go.

          Ergo, bits and pieces are contracted out to all the participating countries (granted we kicked Turkey out )

          F-35 (A version I believe) are also assembled in Italy by the way.

          And the best Air Force int eh world (Israel) likes them a LOT.

          • As usual, TW doesn’t read.
            The posed questiion remains perfectly valid in the context of the message to which it is a reaction.

    • EU don’t invite
      US invite and betray
      Where is in your view the moral high ground?

  9. Interestingly the two KC-Y offerings are both known in detail. Before detailed KC-Y requirements & selection criteria are set by USAF.

    So a massive lobby is underway to make sure the USAF gets its requirements “right”.

    Problem is China is far away & KC10 capability is leaving. How to still make sure the KC46 fits the bill.. work the bill.

    • keesje:

      Unlike the EU, these programs are proposed, assessed and then have to be passed by the US Congress, unlike the EU that are rubber stamped and handed out.

      Airbus killed off MD (which has cascaded into the mess Boeing is in.

      Upshot is there is no other aircraft make other than Airbus.

      So, how do you propose to make a fair competition for a tanker?

      Airbus could have kept making the A300/310, that was an equal to 767 (which out competed the A3300/310)

      If you give Airbus credits for the fuel and belly cargo (setting aside the lack of a cargo door and the can/pallet issue) then the 767 is disadvantaged.

      If you baseline it like the RFP did to replace the KC-135R, then Airbus can’t win (let alone Airbus and LM both having to make a profit.

      Clearly Airbus can’t compete on price.

      And there is no where near the KC-10 capability in the A330MRT, ergo, you can not credit your way out of the issue, ain’t enough credit there.

      The reality is the US is using the A330MRT as a foil. Airbus keeps biting knowing they can’t win. How stupid is that?

      O.Keefe is a blowheart, There was no commercialism of an already commercial aircraft. After its built conversion to a taker is a hands on custom job.

      The US is not allowed to bid on the European projects, its all a wink wink nod nod we split this up and give this to X and that to Y with no competition involved.

      If you don’t like the terms, tell your representatives to stop Airbus from bidding.

      The only way the KC-46A is not going to win is to offer exceptional value and the A330MRT does not do that. A bit more fuel yes (not KC-10 worthy) and a bit more freight (but only awkward in the belly)

      The reality is the EU hardware is overpriced and tends not to work (yes the A330MRT is a good tanker, that is truly rare)

      • “The reality is the EU hardware is overpriced and tends not to work”

        Like the F35, you mean?
        Now there’s an over-priced dud.

        “The analysis all but confirms what was already stated by Free Market Shooter as well as many other sources; the F-35 (in particular the “A” model) is overpriced garbage that can’t beat the aircraft it was designed to replace in many of its roles. ”

        “The F-35 Is One of the 5 Worst Fighter Jets Ever Made”



        The only (misguided) air forces still buying it are doing so out of a sense that they need to align their equipment with the current NATO standard…and perhaps a hope that the project will some day perform according to spec.

        Congratulations to LM for saddling the whole of NATO with a dysfunctional lemon: the Chinese and Russians must be very grateful (and amused).

      • This was the ruse in the last competition to give Boeing a chance:
        “If you baseline it like the RFP did to replace the KC-135R, […]”

        Yes, USAF needs to replace the KC-135R fleet but not with the same one trick pony again resulting in a tarmac queen with rare use.

        No. USAF didn’t asked for a one-to-one KC-135R tanker replacement. USAF wanted an airlifter in first place: https://www.airforcemag.com/PDF/DocumentFile/Documents/2007/KC-Xwhite022807.pdf

        “If you give Airbus credits for the fuel and belly cargo (setting aside the lack of a cargo door and the can/pallet issue) then the 767 is disadvantaged.”

        KC-45 as had won the first competition was offered with a cargo door as available for A330-200F (first flight November 5th, 2009).

        “And there is no where near the KC-10 capability in the A330MRT, […]”
        It’s also not about the fuel carried on tarmac. An A330MRTT can today provide more fuel at distance greater 1,000 nm than a KC-10 because the old DC-10 burns a hell far more fuel.

        KC-10 fleet is nearly at the end of its useful airframe time due to massive use as an airlifter. A far more economic airlifter than a C-17!

        “The reality is” so sad: 787, MAX, 777X, KC-46, CST-100 Starliner, …

  10. Wat some extra Christmas cheer? Voilà!
    Another crony makes an attempt to turn the tables in BA’s favor as regards the Bridge Tanker.

    “Airbus Must Be ‘Grounded’ ”

    “Just two years ago, the World Trade Organization slapped Airbus with a $7.5 billion fine because of the subsidies European governments had been giving the company for more than a decade. That final judgement seems like a huge amount, but it was not a huge surprise to anyone in the military aviation business. Four previous panel and appellate reports, stretching back to 2011, had also found Airbus was taking unfair subsidies. It was only a matter of time before the company had to pay a price.”


    • In the years 2000 to 2001 a Petition re Countervaiing Duties (CVD) re Airbus was prepared by SPEEA without the help of Boeing. It was to be hand delivered to Commerce Department the second week of September 2001
      Due to 911- it was set aside by SPEEA until early 2002. During the hiatus, the now INfamous 767 Tanker lease was promoted to keep the 767 line open, etc.
      But early in 2002, Boeing stepped in with Rudy DeLeon ( former assist sec def ) and effectively stopped such a filing.- Later in 2004 did essentially the same thing that had been proposed by SPEEA.

      A very short summary of the 2001 Petition showed the ” estimated ” “discounts ” of the A330-340 series to be between 16 to 19 percent.

      An parametric analysis of a lot of relevant data was done using many variables in Excel Solver with the following described results copied here,

      The above figures show just ONE of the possible pricing combinations that would satisfy the figures and constraints described below.

      ” With a record total of 311 deliveries in 2000 (241 single-aisles, eight A300-600s and 62 A330/A340 Family aircraft), Airbus delivered four more aircraft than planned, generating its highest ever turnover of US$ 17.2 billion. This brings the cumulative total of Airbus aircraft deliveries to 2,499.” ( from the Airbus site at the time )

      This parametric analysis assumes only an Yr 2000 Average Price/model times the number of Airplanes delivered is proportional to the revenues generated by sales, and in the net, must equal the 17.2 Billion figure.

      We recognize that lease arrangements/receipts which may be included in revenues [‘turnover’] are treated differently between the U.S and the E.U countries , and that planes are discounted from “Average List price“
      The analysis maintained three constraints for all scenarios.
      1) The 17.2 Billion total within about 2 percent, rounded.
      2) A Maximum “average price” by model equal to or less than list
      3) The quantity of planes for each model-series equal to actual deliveries.
      A percentage of the List prices were used to prioritize lower prices for the single isle group of aircraft in most solutions, including the one shown.

      Gosh-20 years later- those numbers still look good.


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