A group of UK and German aerospace academics have written to the European Commission (EC)with a stark warning over the dangers of the Boeing/McDonnell Douglas (MDC)merger, a decision on which is now due by the end July.
The open letter is written by Professor Philip Lawrence, director of the aerospace research group at the University of the West of England. The group also includes leading academics from Germany and the USA, although they were not asked to sign the letter.
"We regard it as imperative that the EU does not now lose its nerve in the battle over global aerospace," warns the letter, adding that "-the merger will create a leviathan corporation which is not subject to market constraints.
"If the merger goes ahead, the European Union should not be afraid to impose penalties on the USA and increase the support of its own industry," says Lawrence, estimating that the US industry is now receiving in the region of $3 billion support annually, including a mix of NASA funding, Pentagon defence-conversion programmes, tax breaks and EximBank export-financing support. He adds that a new study on the extent of this aid is being drawn up by the European Association of Aerospace Industries, potentially re-opening the acrimonious transatlantic subsidies row of the early 1990s.
Meanwhile, the deadline for approval of the merger is nearing. The US Federal Trade Commission (FTC) was expected to approve the merger by midnight on 1 July. Boeing and MDC have already scheduled shareholder meetings to approve the merger for 25 July. The EC's merger task force is expected to receive preliminary recommendations from its advisory group by 4 July, with the task force to present its findings by 23 July. The Commissioners would then decide finally by 31 July.
Reports in the Wall Street Journal suggest that in a move to placate the EC, Boeing may be preparing to eliminate the exclusivity clause from the 20-year aircraft purchase deals with American, Continental and Delta Air Lines. This would allow the airlines to consider offers from Airbus, but would still leave in place orders for 244 aircraft.
Source: Flight International
