Industrial policy isn’t saving Airbus

Timothy P. Carney

November 17, 01:52 PM November 17, 01:52 PM

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Just a few months ago, conservative advocates of corporate welfare were pointing to Airbus as the glimmering model of industrial policy and Boeing as a cautionary tale about capitalism.

https://twitter.com/AmerCompass/status/1646138093320167425

The story never made much sense, considering that Boeing is a very subsidized company and that Boeing’s recent struggles are mostly due to the engine on the 737 Max, which itself is a result of Boeing’s coziness with the U.S. government.

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But now, that story is falling apart entirely. Check out the headlines from the Dubai Air Show:

“Boeing bonanza leaves rival Airbus in the dust at 2023 Dubai Air Show with three times more aircraft orders”

“Dubai Air Show: Boeing Soars Above Airbus with Massive Orders”

In short, airlines want to buy Boeing jets because they are better. Airbus jets, supported aggressively by industrial policy, are inferior.

This undercuts the case made by the American Compass’s Gabriela Rodriguez, who wrote in the spring:

“Airbus caught up and surpassed Boeing as the world’s leading aircraft manufacturer, gaining a reputation for cutting-edge innovation from fly-by-wire controls to composite materials. Boeing, for its part, descended into financialization and outsourcing, disgorging capital to shareholders while lagging in R&D investment, which led ultimately to embarrassing production delays and catastrophic crashes that grounded large portions of its fleet.”

Her argument was that Airbus’s long-term vision, made possible by state support, made it a technologically superior product to Boeing’s planes.

Tim Clark, president of Emirates Airlines, doesn’t see it that way: “We don’t buy airplanes that are defective,” he stated this week, explaining his aversion to Airbus. The problem is that the Rolls Royce engines required way too much maintenance.

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Rolls Royce, like Airbus, is intricately tied up in European industrial policy. Hungary and Rolls Royce are working together on plug-in electric flight. Rolls Royce has turned to the United Kingdom’s government for support on hydrogen-powered flight.

Emirates’s massive purchase of Boeing jets does not appear to involve any financing from the U.S. Export-Import Bank.