Write 4 pages thesis on the topic boeing versus airbus subsidy dispute. The new competitors were not able to survive in a market which was virtually the sole provider of the jets. To help develop a st
Write 4 pages thesis on the topic boeing versus airbus subsidy dispute. The new competitors were not able to survive in a market which was virtually the sole provider of the jets. To help develop a strong competitive foundation, the European governments starting providing substantial subsidies to Airbus for the development cost. The subsidies played important role in forcing the Lockheed out of the jetliner industry whereas Douglas merged with Boeing (Pelletier, 2010). Airbus eventually took the major share of the market and is providing more jetliners as compared to Boeing which raised the concern among the US. This led them to form an agreement at the WTO to reduce the subsidies to provide healthy competitive economic environment. The agreement at WTO clearly stated that both Boeing and Airbus can enjoy the direct governmental subsidies at 33% of the jetliner’s developmental costs. It also included the limitation on the subsidies provided by indirect programs or civilian or military institutions as well. In addition to these, many other limitations were imposed on the subsidies. However the market share for Airbus kept on increasing at a steady rate which again raised the concern for Boeing (Gunstone, 2010).