Chris Jasper/LONDON
The European Commission (EC) is poised to launch an investigation into airframe-engine exclusivity deals following the sole supplier agreement between Boeing and General Electric on the Seattle giant's planned ultra-long-range 777X.
Outgoing EC competition chief Karel Van Miert ordered that a file be opened on exclusivity deals after Boeing announced that the GE90 had been selected for the 777-200X/300X ahead of the Rolls-Royce Trent 8115 and an all-new design from Pratt & Whitney. R-R, which sparked an earlier probe after complaining about the GE-P&W Engine Alliance, denies suggestions that it has objected to the deal.
EC sources say a dossier is being assembled, and a member of Van Miert's staff confirms that "an investigation is taking place". The probe is not yet "active", but Brussels sources say new commissioner Mario Monti is almost certain to order a full investigation when he takes over this month.
Another source close to the case says the EC is unlikely to push for a moratorium on exclusivity deals, but is "moving towards a comprehensive methodology whereby [it] may accept exclusivity, as long as there are serious limitations".
The EC is said to be concerned not only with specific details of the 777 deal, but with the stifling effect that exclusivity could have in such a large market. Boeing's projected demand for 500 777Xs (excluding competition from the Airbus A340-500/600) at $200 million per aircraft (for airframe and engines) equates to a $100 billion market.
Boeing has already suffered at the hands of the EC, with Brussels forcing it to scrap exclusive airline supply deals as part of the price for approval of its 1997 merger with McDonnell Douglas. The US manufacturer agreed not to enter into new pacts with airline customers for 10 years, and not to enforce existing deals with American Airlines, Delta and Continental.
Boeing, which claims the 777X market "would not support development of more than one engine", says its European office has not yet been notified about the new EC investigation.
European rival Airbus says: "Exclusivity is not a concept we support. We are strongly in favour of offering competing powerplant choices where it makes sense."
Airbus adds that R-R's sole-supplier status on the A340-500/600 does not amount to exclusivity because it runs only until 2006. Of GE and Pratt & Whitney, it says: "If either of these US companies wanted to take a second crack at the A340-500/600, they would get a hearing."
Source: Flight International
