The European Commission (EC)has told Boeing that its proposed merger with McDonnell Douglas (MDC) will lead to the resulting company holding a "dominant" position in global markets, and has threatened to ban imports of Boeing/MDC aircraft to European Union markets if its objections are not satisfied.
A letter sent to the Seattle manufacturer on 21 May by EC Competition Commissioner Karel Van Miert links the merger with the other major EC concern - the signing of exclusive, 20-year deals with US airlines for the supply of Boeing aircraft. While the contents of the letter are not being disclosed, Van Miert is known to have demanded Boeing guarantees that it will not abuse its already dominant position in the market, and prevent "free competition".
Although Van Miert has played down suggestions that his stance on the merger is threatening to pitch Europe into a trade war with the USA, any move by Brussels to block deliveries or impose potentially huge fines on Boeing will see Washington retaliate.
An EC source says there is no basis to Boeing's claim that the addition of MDC will not affect the size of its market penetration. "McDonnell Douglas has delivered 24% of the aircraft of more than 100 seats now operational worldwide," says the source. "These aircraft exist, they fly, and one day they will be replaced. In the absence of competitors able to offer alternatives, the contracts will surely go to Boeing."
In response, Boeing chairman and chief executive Phil Condit says that, although the company would continue to work with the EC, the "lead in this case should be given to the US Federal Trade Commission." He brushes aside Van Miert's claim that the exclusive sale contracts are anything to do with the merger issue, saying "-they are not related in any way".
The EC has given Boeing until the end of July to respond.
Source: Flight International
