Case Analysis Details – Airbus Vs. Boeing
Wesley Gregory
INB 300
April 1st, 2022
1. Where do you stand? Do you think EU subsidies and soft loans to Airbus are fair? Why
or why not? What advantages does Airbus gain from free financial support from the EU
governments? Are complaints about the EU’s government intervention fair in light of
Europe’s long history of democratic socialism?
I feel that without the assistance provided from the European government, Airbus would never
have been able to come to fruition. While Boeing regularly receives military endorsement via
contracts, I feel that it is relatively the same type of funding. I feel that without government
intervention Airbus would never have gotten to production, therefore granting Boeing essentially
a monopoly on aircraft production, which isn’t good for obvious reasons. I think that with the
existence of Airbus it requires Boeing, and any other aircraft manufacturers to compete with
each other and create new innovative technologies in order to stay relevant in the market.
2. Under the WTO subsidies agreement, do you think U.S. military contracts with Boeing
amount to subsidies? Have these types of payments provided Boeing with unfair
advantages? Justify your answer.
As stated in my answer to the question above, I believe that competition is of the utmost
importance for any market. While government investments for each company may not be exactly
proportionate, with the massive head start that Boeing had, it was necessary for government
intervention to get Airbus up and running. Due to this, I believe that the financial investments
may not be equal, however, the impact they had on each of the respective companies individually
is strikingly comparable.
3. What about the infrastructure development and investment incentives provided by the
state of Washington to Boeing over the years? Are these fair? Do they give Boeing unfair
competitive advantages?
Providing infrastructure necessary for large-scale development, and incentives for Boeing to
fulfill the intention of the new infrastructure isn’t unfair, its good business. The United States
government at the time had a need for greater and more efficient production of aircraft vehicles,
and in order to justify financially investing into the infrastructure they needed to ensure that
Boeing fulfilled a quota to offset the costs of infrastructure developments. I disagree with the
notion that this gives Boeing a competitive advantage on the basis that if aircraft production was
a priority to the EU, they could have followed suit.
4. Assuming that Airbus cannot compete without subsidies and loans, is it likely that the EU
will discontinue its financial support of Airbus? What are the EU’s vested interests in
continuing to support Airbus?
If it is true that Airbus cannot compete without government funding, there is a very small chance
that government investment from the EU will ever cease, and truthfully, I see very little reason to
why they should. I believe that continuing to establish and fund the Airbus company will directly
and indirectly effect the quality of production for each company. EU’s interests are relatively
clear in the fact that they do not want to be viewed as inferior when compared to aircraft
manufacturing and would like to produce in house as opposed to importing Boeing craft.
5. In the event the WTO rules against Airbus and tells it to stop providing subsidies and soft
loans, how should Airbus management respond? What new approaches can they pursue
to maintain Airbus’ lead in the global commercial aircraft industry?
Airbus management should respond by levying rebuttal against U.S. investments into Boeing and
ensuring that the playing field amid each manufacturer remains as fair as humanly possible.
Similar to how Boeing sought out funding from Japan, Airbus should seek business from
external parties in order to remain competitive.
How are each companies doing now?

Boeing
o Stock price: 190.76 (USD), 6.66% increase (5yrs)
o 583M shares outstanding
o Market capitalization: 112.62B (USD)

Airbus
o Stock price: 30.81 (USD), 60.89% increase (5yrs)
o 3.14B shares outstanding
o Market capitalization: 98.02B (USD)
While Boeing has essentially maintained its value and has slightly increased in the past halfdecade; Airbus has experienced rapid and much more significant growth, amid a lot of volatility
and price fluctuation. Both companies have a large market capitalization, while Boeing remains
ahead for the time-being, Airbus is slowly closing the gap.