Aircraft manufacturer consolidation on the horizon

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By TESTCustomwebLP TESTCustomwebLP October 22, 2010 09:34

Aircraft manufacturer consolidation on the horizon

Tom Enders, Airbus CEO, yesterday lashed out at the “absurdity” of the now six-year-old WTO battle between the European Union and the USA over funding for their respective domestic aircraft manufacturers, saying that the only winners in the end will be aircraft manufacturers in China and Russia. Enders went on to confirm that both sides in the argument had taken state aid and therefore is it of no surprise that the WTO found that both were as guilty as each other.

“Let’s be honest about it, the simple truth is, in the aerospace or aeronautic business, none of us, none of the companies that play a role in it, has been growing without any government support. So let’s accept reality,” said Enders.

What a mess. All of you reading now will no doubt agree that the only way to solve the WTO row is through negotiated settlement but Enders warned that such a move could “accelerate the ascendancy” of both Chinese and Russian aircraft manufacturers who are currently looking to have new aircraft in service by 2016 that could threaten Boeing and Airbus’s duopoly in the lucrative single-aisle, passenger jet market. He sais: “If we talk about China, if we talk about Russia or others, does anyone believe that they will step back and say: ‘Now we understand the WTO rules, we will play exactly by the rules’? Absolutely not, so this is why I call this an absurdity.”

Enders said there would probably be “five or six” commercial aircraft manufacturers in the next 10 years, and this meant “questions of partnership, questions of consolidation, questions of mergers, enter the horizon”.

The Boeing order of last night proves again, if any were needed, that the 737 and A320 market is king. The question is can Boeing and Airbus afford to lower prices when competition hots up in China and Russia. My guess is that they can and they will and in the end their aircraft will remain superior for some time yet to come. Enders, is, in this instance, reaching out with an olive branch and highlighting his wishes to all involved in the WTO mess.

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By TESTCustomwebLP TESTCustomwebLP October 22, 2010 09:34
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