Julian Moxon/Paris
A committee consisting of competitive experts from the 15 European Union member states has come out against the merger of Boeing and McDonnell Douglas (MDC), saying that it is "incompatible" with European Commission (EC) competition regulations. The advisory committee wants the EC to require major concessions when its makes its decision on the alliance on 23 July.
In a move clearly designed to force further concessions from Boeing, the committee has linked approval to a rejection of the "exclusivity" contracts signed this year with three US airlines - American Airlines, Continental Airlines and Delta Air Lines, adding requirements that Boeing and MDC take steps to prevent "spillover" of military and government funding to the civil domain, and provides "intellectual-rights" access to patents and other exclusively held aeronautical data.
On a wider front the EC is reported to be considering requiring Boeing to seek a buyer for MDC's civil-aircraft business. It is also concerned about the size of the in-service fleet of MDC.
A Brussels-based Boeing source says that the company is "disappointed" about the committee's decision, but adds that negotiations are continuing at a "very high level". The committee is "purely consultative" and has no jurisdiction over the EC's Ìnal decision.
If the discussions break down, the EC has threatened to impose its own rules on anti-competitive behaviour and to fine Boeing 10% of its annual turnover, or about $5 billion. It could also impose fines on European companies which sell equipment to the manufacturer and, says a source, could "-make things difficult" for the airlines involved in the exclusivity deals.
Failure to achieve a successful outcome to the talks is thought likely to trigger a full-scale trade war between the USA and Europe. The deal was approved on 1 July by the US Federal Trade Commission.
Source: Flight International
