By Steven McGuire
Examine pupil Steven McGuire examines a huge sectoral dispute among the us and the ecu group often called the "Airbus dispute". McGuire explores how the dispute was once settled diplomatically with out each side resorting to adverse countermeasures. probably all involved remembered the Boston Tea occasion.
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Extra resources for Airbus Industrie: Conflict and Cooperation in US-EC Trade Relations
Purchasing patterns have become more complex over time, with airlines less willing to stay with one supplier. Nonetheless, given the long time scale of deliveries and the cost of maintaining spare parts inventories, once airlines choose one or two suppliers, they typically stay with them for a long time. With a recent United sale, Airbus now supplies to all of the major US airlines. Boeing has always sold to European clients. This is in part because its 747 model is the only type in the 400-500-seat class.
Second, government aid was provided to help underwrite and promote technological development in the industry. Third, on the production side, these governments recognized the importance of efficiencies gained by large-scale production. Economies of scale had to be achieved by merging small firms into larger units. In both countries, this meant the virtual disappearance of the small, independent aircraft builder. In Britain, this process of combining manufacturers culminated in the creation of British Aerospace (BAe) in 1977.
Whereas in earlier days, the cost of financing jet purchases could be passed on to the consumer, the new environment militated against this. Moreover, the type of aircraft that was in demand after deregulation was not the large, long-range transports such as the 707, DC-8 or 747. In the regulated environment, the CAB fare schedule was designed so as to make fares on longer haul flights - trans-Atlantic or transcontinental - relatively more expensive than short-haul flights. This policy had two effects.
Airbus Industrie: Conflict and Cooperation in US-EC Trade Relations by Steven McGuire