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✪ Li Wei Zhang Mengkun | School of International Relations, Renmin University of China
[Introduction]
On the evening of July 1, 2022, China's three major aviation groups respectively announced that they had signed agreements with Airbus on the same day to purchase a total of 292 A320NEO series from Airbus. The total price of aircraft is equivalent to more than 240 billion yuan. This is the first time in the past three years that China's civil aviation industry has announced such a large-scale passenger aircraft order.
As of the end of 2020, the number of Airbus aircraft in service in China accounted for 51% of the domestic civil aviation market. China has surpassed the United States to become the largest market for Airbus in a single country.
After World War II, American Boeing and other aviation giants have always occupied an overwhelming position in the global commercial aircraft market. Commercial aircraft in European countries were unable to withstand the pressure of American competition and were retreating.
As a strategic enterprise, how did Airbus rise as a latecomer? How does political power play a role in the rise of strategic enterprises?
This article analyzes it from an internal European perspective and believes that
Airbus's success is not just a commercial "counterattack", but actually has a solid political foundation laid by European integration .
For highly complex strategic industries, the author proposes a two-dimensional analysis framework of "technology-market", puts the European Union in the context of international political economy, and studies its important role in the "rise of Airbus".
The author pointed out that
as a powerful geopolitical force, European integration builds strategic mutual trust by cultivating cooperation habits,
overcomes internal technological nationalism, and promotes relevant European countries to form a stable multinational division of labor model in aircraft development; at the same time, ,
European integration internally integrates the fragmented civil aviation market, and externally enhances the ability of European countries to develop international markets through economic diplomacy.
The experience of the rise of Airbus provides a typical case for the construction of political economics theory about strategic enterprises, and also provides an important reference for the development of relevant strategic enterprises in my country.
This article is excerpted from "The Political Basis for the Rise of Airbus - Technology Integration, Market Expansion and the Growth of Strategic Enterprises", was originally published in " World Economy and Politics " 2021 Issue 11 . Thearticle only represents the author's opinion and is for your reference only.
The political basis for the rise of Airbus
- Technology integration, market expansion
and the growth of strategic enterprises
▍ Introduction
The aviation industry is a shining pearl in the history of human industrial civilization, and has always been a must-win in the industrial competition between major powers. In the era of small propeller planes before World War II, the United States and major European countries stood on the same starting line. The two sides have been keeping pace with each other in the aviation industry for a long time. However, after the end of World War II, as the aviation industry entered the era of large jet aircraft, the balance of competition between the United States and Europe changed significantly: American aviation giants such as Boeing, McDonnell Douglas and Lockheed were unstoppable and dominated the global commercial aircraft market. achieved an overwhelming position.
In 1970, major European countries jointly launched a large passenger aircraft project called " Airbus " (hereinafter referred to as "Airbus"), trying to pool the efforts of many countries to reverse the competitive decline of the European civil aviation industry. From 1970 to 2020, Airbus spent half a century to completely shake the United States' hegemonic position in the field of large commercial aircraft manufacturing and reshape the competitive landscape of the global civil aviation industry. Against the macro backdrop of declining overall industrial competitiveness in Europe, Airbus has become an important example of European companies defeating their American counterparts and a precious symbol of Europe's strength in the high-end industrial field.
Airbus's success is not just a brilliant commercial "counterattack", it stems from the solid political foundation laid by European integration. European integration has comprehensively enhanced the ability of major European countries to jointly provide technical and market support for Airbus. This is the fundamental reason why Airbus has overcome the disadvantage of being a latecomer in the imperfectly competitive market and achieved a rise against the trend. The experience of the rise of Airbus provides a typical case for the construction of political economic theories about strategic enterprises, and at the same time has important practical reference significance for the development of relevant strategic enterprises in China.
▍United Europe and the Rise of Airbus: A Technology-Market Two-Dimensional Analysis Framework
Compared with the first-mover Boeing, the late-mover Airbus is one of the few strategic enterprises in the world that does not have a clear nationality. European integration has greatly improved the industrial support capabilities of European countries for large commercial aircraft manufacturing, mainly reflected in the support of technology integration and market expansion, which in turn provides Airbus with the technical and market advantages to surpass the existing oligarch and realize the rise of latecomers. A powerful boost. The practice of Airbus has profoundly proved that in the context of increasingly fierce competition among major powers, only by uniting can European countries gain a place in strategic industries and strategic fields (such as currency, security, etc.).
(1) Technical level and market size: the two foundations for the growth of the civil aviation industry
The civil aviation industry has extremely high barriers to entry. These two crucial factors have blocked most countries in the world from manufacturing large passenger aircraft. Besides: is based on technical level and market size. In terms of technical level, the aviation manufacturing industry is a typical knowledge-intensive industry . Technology, especially the integration and innovation capabilities of complex technologies, play a decisive role in aircraft development. The three links of aircraft model design and development, component production and assembly, and aircraft flight test certification have extremely high technical requirements. What they test is not a single technical level, but the technological ecosystem of the entire industry, including talent reserves, infrastructure equipment, and innovation environment. .
The high-tech content of commercial aircraft manufacturing has led to two direct consequences: First, the investment in R&D funds is very huge. Although the civil aviation industry is a "money-making industry", it is also a "money-burning industry"; second, the development cycle is very long and is a In a typical "slow-heating industry", an aircraft needs to complete the entire process of design, production, assembly, test flight, certification and delivery, ranging from a few years to more than ten years or even decades.
In addition to high technical requirements, the size of the market also has a significant impact on the success or failure of a certain aircraft model and aircraft manufacturer. First of all, whether it can obtain a larger market size is directly related to whether aircraft manufacturers can achieve economies of scale, spread huge R&D costs, and then gain cost advantages. The R&D and production of aircraft is a process of gradually reducing costs. There is an important "break-even point", that is, the aircraft manufacturer must sell a certain number of aircraft to recover the development costs of a certain model, and then transfer part of it to Surplus funds are invested in a new round of technology research and development.
Secondly, the customer base of commercial aircraft is highly sticky. Obtaining more market share in advance means occupying a stable customer base, which facilitates further expansion of the market scale. Due to the long service life of aircraft (usually more than 20 years), in order to avoid increased costs in later maintenance and other aspects, airlines often show consumer loyalty to a certain aircraft model and have a "lock-in" in the choice of aircraft manufacturer. or "path dependence" characteristics.
(2) European integration and improvement of industrial support capabilities
The European integration process has greatly improved the support capabilities of European countries for commercial aircraft manufacturing in terms of industrial technology integration and product market expansion, both of which are important to national economic diplomacy. A test of ability. Therefore, the late rise of the European civil aviation industry, especially the manufacturing of large commercial aircraft, has gone far beyond the scope that can be explained by industrial economics . It involves a more ambitious international political economics analysis framework.
European integration has improved its industrial support capabilities for commercial aircraft manufacturing through two paths: First, European integration has resolved major geopolitical conflicts in the region , enhanced trust among member states, and cultivated national cooperation habits between countries, thereby enhancing the willingness to cooperate between countries in strategic and sensitive industrial fields. In addition, political mutual trust also facilitates the distribution of industrial interests between countries. Secondly, European integration has created a variety of inter-state cooperation mechanisms and supranational institutions, which further facilitates the development of cooperative behaviors. From European Coal and Steel Association to European Community to European Union , various supranational mechanisms and arrangements and common strategic agendas have greatly enhanced Europe’s collective action capabilities internally and externally, such as financial investment and market expansion. wait.
In terms of technical support, the specific role of in the European integration process of is to encourage major European countries to overcome technological nationalism (techno-nationalism) and form a stable division of labor system in the R&D and production of large passenger aircraft. is based on Europe ( Regionalism rather than nationalism integrates and builds the industrial chain and technological ecology of commercial aircraft manufacturing, giving full play to the synergy effect of multiple countries. Transnational technical cooperation in sensitive industries is a barometer of political relations between countries. is not only that. The continuously strengthening supranational mechanism in the European region has promoted the European integration process from trade and monetary integration to technological integration by launching joint innovation projects and formulating common science and technology policies.
In terms of market support, European integration has greatly enhanced the ability of European countries to support latecomer manufacturers in exploring local markets and developing markets outside the region. First of all, the direct economic consequence of European integration is the establishment of a unified market, which greatly increases the scale of the internal market. Secondly, European integration has politically enhanced the ability of major European countries to develop passenger aircraft sales markets outside the region through economic diplomacy. Aircraft, especially large passenger aircraft, are highly capital-intensive products. Many countries have adopted centralized batch procurement models to enhance the bargaining power of manufacturers. Not only that, many airlines themselves are government-owned or government-supported. The sale of passenger aircraft is not only a commercial transaction, but also a "political transaction", which requires the manufacturer's home country to come to the front and provide political support for aircraft sales through economic diplomacy.
If the corporate organizational structure is used as the dividing standard, the growth history of Airbus can be divided into two stages: (1) 1970-2000 as the Airbus Group as a multinational consortium; (2) 2001-2020 as an independent Airbus as a corporate entity. Next, this article will use the aforementioned technology-market two-dimensional analysis framework to comprehensively explain how the continuous upgrading of European integration in these two stages can enhance the industrial support capabilities of European countries for Airbus, thereby helping Airbus surpass its competitors. The first-mover advantage enables late-mover rise.
▍The development of European integration and the growth of Airbus (1970-2000)
Faced with the overwhelming defeat of the European commercial aircraft project, almost at the same time as the European Community was established, the United Kingdom, France and Germany established the European Community in 1967. A memorandum of understanding was signed in September 2016, deciding to work together to build a new Airbus A300 project. At that time, Boeing Company's narrow-body passenger aircraft B737 was delivered for the first time and became the most popular aircraft in history. The super-large wide-body passenger aircraft B747 is also about to debut. This memorandum demonstrates the strong sense of crisis among European countries and the sense of urgency to unite and strengthen themselves under the pressure of competition.
On December 18, 1970, Airbus Industrial Group was officially established. This is not an independent multinational company, but a multinational enterprise consortium . This has proven to be the starting point for a new era in the European civil aviation industry.
(1) Technical support: the construction of a multi-national division of labor model and the expansion of government financial investment
As an aircraft brand shared by multiple countries, Airbus represents the firm commitment of major European countries to "technological Europe", that is, from the perspective of Eurocentrism Instead of looking at the development of large commercial aircraft from a state-centric perspective.In 1977, the then French Prime Minister Raymond Barr even claimed that "any aircraft in France should take off within the Airbus Group."
Figure 1 Annual deliveries of large commercial aircraft in the United States and Europe from 1958 to 1968
When the Airbus Group was established in 1970, the British government did not participate as promised. In the face of this major change, France and Germany did not retreat, but showed their determination to unite sincerely. Germany took over the development and assembly of the wings and partly outsourced this work to private British company Hawker Siddeley. The company bears 40% of R&D costs, with Germany bearing the remaining 60%. In this way, Hawker Siddeley participated in the Airbus project as a system subcontractor, but it was not a formal member of the Airbus Group and had no voting rights. During the negotiation process for the work allocation of the A300B project, France, Germany and Hawker Siddeley aimed to achieve cooperation. The work allocation was mainly based on the technical experience and foundation of each actor, and each actor also fully mobilized their own resources. In order to make the results of work allocation beneficial to themselves.
Table 1 Work distribution of the A300B project of Airbus Industry
Since then, the work distribution of A310 has basically maintained the division of labor pattern of the A300B project. At this point, Airbus Group has created a new aircraft development model with multinational division of labor. In this model, partner companies from different countries share the responsibility for the design, development and production of different parts of the aircraft. This aircraft has no nationality, only continents. membership. This intra-industry division of labor is not spontaneously formed by the "invisible hand" of the market, but is the product of intergovernmental agreements. It highly relies on intergovernmental contracts, and this political contract eventually evolved into a stable division of labor habit. In this regard, some scholars pointed out that the A300 and A310 absorbed almost the entire European technical capabilities in the civil aviation industry.
In January 1979, the British government expressed its support for British Aerospace Corporation to participate in the A310 project and provided the project with a low-interest loan of 50 million pounds for technology research and development. Britain's positive attitude received a positive response from France and Germany. In the end, British Aerospace Corporation obtained 20% of Airbus Group's shares on behalf of the British government. France and Germany's shares in Airbus dropped to 37.9% respectively. Spain's shareholding structure constant. This major adjustment in the shareholding structure marks the UK's return to the Airbus project as a formal member state, and the Airbus "Quartet" multinational cooperation pattern has been fully formed.
Table 2 Equity changes in the early days of Airbus (unit: %)
After continuous adjustments, the division of labor model for Airbus aircraft development has gradually stabilized. Germany and France are responsible for the fuselage, the United Kingdom is responsible for the wings, Spain is responsible for the tail, and finally Final assembly is carried out in Toulouse, France, which reflects France's "locomotive" status in the Airbus project. This stable division of labor and cooperation model of is not only the result of the mutual game between member states, but also the result of the continuous strengthening of strategic mutual trust among European countries. Although work distribution sometimes causes friction among Airbus partners and member states, it promotes R&D efficiency and technological innovation in aircraft development, ensuring that Airbus aircraft can integrate European wisdom.
In addition to the main airframe components and design and assembly completed within the Airbus Group, the two major components of Airbus aircraft engines and landing gear are purchased from suppliers outside the group, including the British Rolls-Royce Company It is the main engine supplier for Airbus wide-body aircraft; the engines for narrow-body aircraft are mostly from CFM International, a US-French joint venture, while the landing gear is mostly provided by France's Safran Group and Germany's Liebherr. With Airbus Group as the center, the European civil aviation industry has formed a complete industrial ecology and supply chain with orderly division of labor, thereby jointly supporting the European brand developed for large passenger aircraft.
Table 3 Five early Airbus models
In addition, strategic mutual trust among European countries has also greatly strengthened the willingness and ability of the governments of Airbus member states to provide R&D financial support for Airbus projects. As a consortium of enterprises, the Airbus Group itself does not have independent financial capabilities and requires a large amount of financial support from member states. This was also the main reason why the United States launched a subsidy complaint against Airbus in the 1980s.The amount of government aid Airbus received is scattered across the literature and reports, and the figures vary widely. The convergence of the financial power of the three major countries, Britain, France and Germany, helped Airbus withstand the continuous financial deficit in the first 20 years and unswervingly focus on the research and development of different models.
Table 4 Financial support for Airbus from France, Germany and the United Kingdom (unit: 100 million US dollars)
(2) Market support: intra-regional procurement support and external market defense
European integration during this period was the most important in the economic field The achievement is the comprehensive integration of the market and the continuous expansion of the size of the single market, which provides the basis for Airbus to cultivate a crucial start-up market, allowing Airbus to have a huge domestic market in the face of high market entry barriers created by American oligarchs. Provide strong support to help them survive the difficult growth period before the break-even point.
Airbus's member states jointly provided initial procurement support for Airbus aircraft. The launch users of Airbus's early models were all member states' national airlines , which provided Airbus with the first ticket to market entry. . When signing the Airbus establishment agreement, the member states established a basic principle that the national airlines of the member states are obliged to take the lead in purchasing Airbus aircraft. When the A300 project was launched, Germany, the United Kingdom and France each promised that their national airlines would purchase 25 A300 aircraft, and promised not to participate in other projects that compete with Airbus or support their competitors. Throughout the 1970s, the majority of Airbus Group aircraft were purchased by airlines in four member countries.
After decades of testing in the post-war air passenger transport market, single-aisle narrow-body aircraft are recognized as the models with the greatest market demand. If Airbus cannot make a difference in this type of passenger aircraft market, it will be difficult to truly gain a foothold. In 1987, the A320 made its first flight. This aircraft was designed to compete with the Boeing B737. As a latecomer, the A320 is a full 20 years behind its opponents. Whether it can "seize food from the tiger's mouth" directly determines the success or failure of the entire Airbus project. Since the B737 was already quite mature at the time, loyal local supporters were necessary to break the market's dependence on the B737.
As early as the 1981 Paris Air Show, Air France announced an order for 25 A320 aircraft, while retaining the right of priority for 25 aircraft. When the A320 project was officially announced in 1984, Airbus already had 80 confirmed orders, all of which came from European countries. These initial orders provide strong market support and important confidence support for the continued advancement of the Airbus project. At the Paris Air Show in 1987, 10 customers including Air France and Lufthansa committed to order 130 A330/A340 and its derivatives. This is the largest order in the history of Airbus, marking that Airbus has gradually overcome the difficult early market cultivation period and has begun to become an important competitor in the global passenger aircraft market.
In the 1990s, European airworthiness standards were completely harmonized, which facilitated Airbus' expansion into the broader European market. Civil aircraft need to be supervised by a complete set of airworthiness standards. The unification of airworthiness standards is an important part of the unification of European single market rules. In 1992, the European Community countries established the Joint Aviation Authority (JAA) to uniformly formulate aviation regulations and technical and safety standards for member states. Ten years later, the United Aviation Administration was upgraded from an association of airworthiness authorities of member states to a supranational agency under the leadership of the European Union, the European Aviation Safety Agency (EASA), which centrally exercises some of the civil aviation management sovereignty of member states. This marks the Europe has formed an airworthiness management system with the same voice as FAA (FAA), which has further enhanced the integration of the European aviation market and is more conducive to the European market accepting aircraft from local manufacturers.
As of 1993, Airbus's market share in the European market clearly exceeded its share in the three market segments of short-range narrow-body aircraft (A320), long-range large aircraft (A330/A340) and medium-range medium aircraft (A300/A310). Performance in the US market (see Table 5). It can be said that in the first 30 years of Airbus's growth, strong support from the European local market helped Airbus go through the climbing period of growth, and European integration promoted the purchase of Airbus aircraft by local European airlines.
Table 5 Airbus’ market share in different regions in 1993 (unit: %)
In the 1980s, as Airbus continued to expand its market in the United States, the United States began to change its attitude of despising Airbus and frequently accused European countries of treating Airbus R&D aid violates the General Agreement on Tariffs and Trade (GATT), requiring the EC to limit it and threatening to appeal to GATT. During a critical period of Airbus's growth, US-EU trade frictions posed a serious challenge to Airbus's survival because the US market is crucial to Airbus' development.
During the response process, European countries have always shown extremely resolute unity and used collective strength to respond to US pressure. It is the European Community that negotiates subsidy issues with the US government on behalf of Airbus, which means that European countries regard Airbus's subsidy dispute as a European problem, not just a problem for one or a few countries. In April 1992, the United States and Europe signed the "Airbus Agreement", which temporarily resolved their differences through moderate restrictions on subsidies. The first round of the US-EU aircraft subsidy dispute was resolved by reconciliation between the two parties without the outbreak of a trade war. In this process, the European Community used the common market as a weight, and the United States did not make up its mind to fight an "aircraft trade war" with Europe. This was because many European airlines still purchased a large number of American aircraft at that time.
The EU not only demonstrated its strong industrial defense capabilities in the European and American subsidy disputes, but also strongly intervened in the merger of Boeing and McDonnell Douglas on antitrust grounds. This was the EU's proactive offensive against the United States in the civil aviation industry. Although the EU failed to prevent the merger of Boeing and McDonnell Douglas, by intervening in this incident and forcing Boeing to make major compromises, the EU demonstrated its strong economic diplomacy capabilities and conveyed to the world its determination to help Airbus defend the order of free competition. information. In the competition between the European and American civil aviation industries, the EU is Airbus's strong political backing.
With the collective support of European countries, after 20 years of accumulation from 1970 to 2000, Airbus's order volume and market share increased rapidly in the next 10 years. In 1994, Airbus's annual orders reached 125, surpassing Boeing's 111 for the first time. Around 1995, Airbus achieved its initial strategic goal of occupying 30% of the global market, although the realization of this goal was delayed by more than ten years than expected. In 1996, Airbus was considered profitable and had successfully crossed the critical break-even point.
Although there is still a gap between Boeing and Airbus, Airbus, a multinational conglomerate, has spent 30 years building five major aircraft models. It has not only successfully survived in the commercial aircraft market, but also firmly held the market leadership. the pace of the person. After nearly a generation of European leadership's cooperation and efforts, Airbus was established on the basis of mutual respect and support among member states, integrating the superior resources of France, Germany, the United Kingdom and Spain, and finally built this historic building. industry-leading enterprise.
Figure 2 Annual order volume of Airbus and Boeing from 1989 to 2000
▍European integration upgrade and Airbus’s rise to the top (2001-2020)
Entering the 21st century, Airbus and Boeing’s technology research and development and market share competition Entering a new historical stage. The competition between the two companies has actually become a competition in the civil aviation industry between the two major economies of Europe and the United States, which has led to a more intense political competition among major powers. In this changing situation, the continued development of European integration has created a stronger political backing for Airbus and Boeing to compete for dominance in the global civil aviation industry.
(1) Technical support: Strengthening of the multinational division of labor model and the formation of a diversified financing framework
In the technological competition with Boeing, Airbus’s greatest achievement in aircraft model research and development is the two new generation wide-body aircraft, A380 and A350. The delivery and use of the aircraft marks the formation of a comprehensive and seamless competitive relationship between Airbus and Boeing in passenger aircraft models, and their successful development is the result of vigorous cooperation between major European countries.
The A380, known as the "Big Mac in the Sky", is the largest aircraft project in human history and is known as the "flagship product of the 21st century". It aims to challenge the dominance of the Boeing B747, known as the "Queen of the Skies", in the long-distance air passenger transport market. status.Although the A380 ultimately suffered a commercial failure, it was an astonishing success technically. The A380 shows that Airbus already possesses the technical strength to develop the most advanced super-large passenger aircraft in the world, setting an important benchmark for the future aviation industry.
In contrast, Airbus's latest aircraft, the A350, has achieved both technical and commercial success. It is the product of competition between Airbus and Boeing's "Dream Plane" B787. The first A350 was delivered to Qatar Airways at the end of 2014. As of the beginning of 2020, when the COVID-19 epidemic broke out, Airbus had delivered 350 aircraft in 5 years, which marked that the A350 has gradually become a commercially successful model. . The A350 inherits and develops a large number of technical resources originally developed for the A380, and pushes the characteristics of Airbus aircraft to new heights in terms of autonomous driving and aircraft model commonality.
Airbus combines the joint efforts of multinational technology research and development and manufacturing to jointly complete the development of aircraft. This advantage has forced Boeing, which has always adhered to the vertical integration model, to reform and divide the design and manufacturing tasks of the wings of its latest model B787. The contract was given to Japan, and Boeing had "never purchased a wing from outside the country before." Japan's three major heavy industry companies, with the support of the Japanese government, "completed this task with the attitude that the B787 is their own product." Not only that, the B787's body uses a large number of new composite materials, which is largely due to Japan's strong technical strength in this field.
Since Airbus has become a public company with dispersed equity after undergoing organizational structure reforms, state-owned shares are increasingly diluted, and direct government support is contrary to market fairness and inconsistent with WTO basic rules. In this case, European countries have provided financing support to Airbus in a more diversified manner, including providing financial support through the regional multilateral development bank- European Investment Bank . It is worth mentioning that the R&D loan provided by the European Investment Bank to Airbus was deemed legal by the WTO.
Table 6 Airbus’ loan projects at the European Investment Bank from 2000 to the present
Not only that, the European Investment Bank has also provided R&D funding loans to Airbus’ important suppliers and partners. In 2008 and 2015, the European Investment Bank provided loans of 250 million euros and 280 million euros respectively to Rolls-Royce's Trent XWB engine project for technology research and development including the engine. Considering the important position of aeroengines in aircraft components, especially the engine that is exclusively used to power the A350, R&D support for Rolls-Royce is support for Airbus. In addition to engine suppliers, the European Investment Bank has also funded some other important supporting aviation industry projects and has become an important financial supporter of the European aviation industry system.
In addition to the above support channels, major industrial strategies and policies at the EU level also provide a strong knowledge supply for Airbus' technological development. As the European integration process develops in the direction of a diplomatic and security alliance, the EU has begun to promote supranational cooperation initiatives in some originally relatively sensitive industrial areas, including common aerospace policy and defense industry policy.
(2) Market support: Responding to subsidy disputes and launching "aircraft diplomacy"
The market competition between Airbus and Boeing has also entered a fierce stage. As a solid political backing for Airbus, the EU and its major member states have launched active economic diplomacy to protect Airbus' market space. They not only fought the second round of subsidy wars with the United States, but also actively helped Airbus expand new overseas markets. Running around, especially in the Asian market, which is growing the fastest, has made a lot of gains, and even came from behind.
The competition between Airbus and Boeing to develop a new generation of aircraft in the 21st century requires massive capital investment, which has once again exposed the issue of government subsidies. In 2004, the U.S. government accused European countries of providing excessive subsidies to Airbus in the A380 project, violating the 1992 bilateral agreement. This marked the emergence of a new round of U.S.-European subsidy disputes. The dispute over aircraft subsidies between the United States and Europe eventually evolved into a "tariff war" between the two sides in 2019, which lasted for more than a year. It was not until the Biden administration came to power in 2021 that the two sides reached an agreement to end the 17-year-old dispute. The second round of the US-EU aircraft subsidy dispute.
In addition to resolutely defending Airbus in subsidy disputes, European heads of government and diplomats also frequently act as "salesmen" for Airbus, using the power of national economic diplomacy to help Airbus expand markets outside the region. Entering the 21st century, the U.S. and European civil aviation markets are generally saturated, and airlines have formed fixed purchase preferences for passenger aircraft models. Emerging Asian markets, especially the rapidly developing Chinese market, have become markets for Airbus and Boeing. The “new battlefield” for contention. Leaders of major European countries attach great importance to "aircraft diplomacy" with Asian countries, especially helping Airbus promote two new models, the A380 and A350, and have achieved very positive results.
In the "aircraft diplomacy" of European countries, China is the most important target. This is because China is becoming the largest buyer of commercial aircraft in the international market. At the end of the 20th century, Airbus's global market share was close to 50%, but its market share in China was only 30%. The Chinese market has long been a weak link in Airbus's global market. Therefore, "aircraft diplomacy" has become an important part of the economic diplomacy of major European countries towards China. In October 2006, then French President Chirac visited China. Under the promotion and witness of the leaders of China and France, China and Airbus signed a framework agreement in Beijing to order 150 A320 series aircraft and order 20 The letter of intent for an A350 wide-body aircraft has a total value of more than 10 billion US dollars. This is not only the largest aircraft order Airbus has received since entering the Chinese market 20 years ago, but also the largest aircraft order signed in the history of China's civil aviation at that time. This diplomatic visit also reached another important cooperation agreement. Airbus and Chinese parties signed an agreement to jointly build an A320 series aircraft assembly line in Tianjin. This was Airbus's first production line outside Europe at the time. Not only It is a major achievement of China-EU civil aviation industry cooperation and an important cooperation project to strengthen the strategic partnership between China and Europe. Chirac called it the "strategic marriage" of China and Europe, and he himself won the title of Airbus "super salesman" for it. .
Table 7 Airbus China orders signed by European countries through "aircraft diplomacy"
In the 20 years from 2001 to 2020, thanks to the huge political support provided by further European integration, Airbus continued to encroach on Boeing's territory, completing It has changed its role from challenger to leader, which is reflected in delivery volume, market share and order volume. In 2003, Airbus surpassed its rival Boeing in the United States in delivery volume for the first time, accounting for 52% of global aircraft deliveries that year. In 2019 and 2020, Airbus's order volume and delivery volume have exceeded Boeing's for two consecutive years. Airbus has widened the distance from Boeing in many aspects and ushered in its peak moment.
▍ Conclusion
In today's era, the foundation of national strength lies in the economy, the foundation of economic strength lies in industry, and the foundation of industrial strength lies in enterprises. Those leading enterprises that carry the mission of developing strategic industries form the core pillar of national strength and are the cornerstone for major countries to participate in international competition. Any aspiring major country will support the development of its own strategic enterprises through domestic and diplomatic means. The civil aviation industry, especially the manufacturing of large commercial aircraft, is an out-and-out strategic industry. Airbus and Boeing are crucial strategic enterprises in Europe and the United States respectively.
As a powerful geopolitical force, European integration has greatly enhanced the technical and market support capabilities of major European countries for Airbus. As a result, Airbus overcame the incomplete competition in the commercial aircraft market and eventually surpassed Boeing, which had the first-mover advantage. It later became the leader in large-scale commercial aircraft manufacturing and developed into an important benchmark for integrating European industrial forces and building a European champion enterprise. . European integration constitutes the most important political basis for the rise of Airbus. In this sense, Airbus is another important political product of the European integration process after the Euro.
This article was originally published in "World Economy and Politics" Issue 11, 2021, with the original title "The Political Basis for the Rise of Airbus - Technology Integration, Market Expansion and the Growth of Strategic Enterprises". Due to limited space, only part of the content is excerpted and published. welcomes personal sharing. For media reprinting, please contact the copyright owner.
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