Letter: Flying finance

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Hamish McRae is right to point out (Business, 3 February) that the civil aircraft industry is one of the more extreme examples of corporate concentration, not least due to its highly capitalistic nature and its huge barriers to entry. However, his suggestion that of the two remaining aircraft manufacturers, Airbus and Boeing, only the latter can make a living without "subsidies" is wide of the mark.

Airbus Industrie does not receive subsidies - if Mr McRae means free, financial hand-outs. Rather, its industrial partners have received refundable launch-aid for some of the costs of research and development of specific aircraft programmes, with principal and interest repayable as a levy on aircraft sales. The European governments, having shared the risks of setting up aircraft-manufacturing activity in Europe, also share in its rewards.

The US authorities, on the other hand, through an indirect financial aid mechanism where repayment terms are nebulous, are generous to their manufacturers, thereby giving them a measurable advantage over us. Were Airbus Industrie the beneficiary of such largesse, its challenge to Boeing would be even more formidable.


Vice President, Corporate Communications

Airbus Industrie

Blagnac, France