Friday 20 April 2018

Airbus sees US hand in $22bn Boeing deal

Paris, December 2, 2011

Europe's Airbus accused the White House of derailing open competition by helping Boeing win a record aircraft deal in Indonesia as details emerged of a behind-the-scenes struggle over jobs and airplane sales worth almost $22 billion.

The European planemaker's sales chief said lobbying over the deal on behalf of President Barack Obama had demonstrated double standards on free-market competition amid an ongoing row between Washington and Europe over aircraft subsidies.

"There's only one superpower in the world and I think we know it isn't France; it is probably represented by President Obama," John Leahy said at a market briefing in Washington on Thursday.

"When he starts making headlines that he is selling airplanes and how that wouldn't happen without his personal involvement, we are seeing economic distortion and we shouldn't be talking about free and open level playing fields for trade around the world if the U.S. pulls stuff like that."

Last month, Obama showcased an order for 230 jets from Indonesian budget carrier Lion Air worth $21.7 billion at list prices, the largest commercial deal in Boeing's history.

That came months after Airbus, a subsidiary of EADS , pulled off a dramatic coup by landing its own largest order in volume terms for 260 aircraft from American Airlines, toppling an exclusive Boeing customer.

The move prompted Boeing to alter its strategy and match Airbus by refreshing its most-sold 737 model with new engines.

Attending the Lion Air signing ceremony during a nine-day Pacific tour in mid-November, Obama called the deal a "win-win" for U.S. workers and Asian consumers and said his administration and the Ex-Im bank played a key role in facilitating the sale.

The White House said it would support 110,000 industrial U.S. jobs, addressing a key issue in next year's elections.

Analysts say a deal between Lion Air and Airbus would have been a surprise since it has an all-Boeing fleet and Europe's jetmaker has previously tried and failed to win its business.

But lifting the lid on secretive yet fruitless negotiations to invade Boeing's turf a second time, Leahy said Airbus might have won a deal if it had not been for political intervention.

"The CEO and owner of that airline, who has bought nothing but Boeing airplanes, actually came to see me in Toulouse twice to talk about buying the airplanes and in the end told me he had no choice," Leahy said.

"I am not sure what 'has no choice' means, but there seems to have been an awful lot of political interference and I think the White House is very proud of that, taking credit for it, saying it would not have happened without White House intervention. Well, that is probably true, but it doesn't really speak well for freedom of competition and free trade."

There was no immediate comment from the White House. A Boeing spokesman said it never commented on such negotiations.

News of the Lion Air deal angered Airbus, which thought it had pulled off another dramatic coup against Boeing, though analysts do not expect too many defections between rival camps.

A person with direct knowledge of the talks said Airbus had progressed as far as reaching a provisional deal known as a memorandum of understanding with Lion Air, which although non-binding, usually signals an end to the competition.

Lion Air declined comment, but denied bowing to pressure.

"I do not wish to comment on that issue, but all I can say is we did the purchase purely on a commercial basis and we have our independence in doing so," spokesman Edward Sirait said. – Reuters

Tags: airbus | US | Boeing | White House |


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