Re: ATR-72's and Airbuses

Date:         01 Jan 97 20:59:23 
From:         graemec@ibm.net
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tschell@s.psych.uiuc.edu (Terry Schell) writes:
>alexander.mclellan@eurocontrol.be (McLELLAN Alexander, DED/1) writes:
>>(I should say that I'm not against such grants/loans in principle - I'm
>>against the pretence that only some governments make such
>>grants/loans/subsidies.)

>...It is worth noting that this support is *not* for commercial aircraft
>since this engine is designed for planes with <6 seats.

I always thought that a commercial aircraft manufacturer was one that
made aeroplanes for profit and a non-commercial manufacturer was one
that went broke or was subsidised by the government.  Did Cessna stop
producing aircraft commercially when they stopped building the Bobcat and
began again when they started the 400 series?  Does this make
Honda a non-commercial manufacturer because they only produce little
vehicles?

>It is certainly a subsidy ...

Yes, it is - and all the rest is excuses.

>...since it is designed to help an industry that completely
>died a couple years ago and to help GA planes to meet tougher
>emission standards that undoubtably lie ahead.
>I completely support this sort of "tweaking" of the free market when
>the market is unable to fix itself. Without this engine we will never
>be able to get rid of the 110 LL fuel that is both expensive and
>environmentally hazardous.

With only tiny variations, you sound just like an Airbus executive of
10-15 years ago.  As Alexander said above, *nobody* is against subsidies,
as Terry's contribution proves.  It's just the hypocrisy which can become a
little irritating.

In general, I fail to understand the heat generated by this debate.  My
Econ 101 said that subsidies/tariffs/etc were bad because of the cost to
the *host* economy (not foreigners) in misallocated resources and higher
costs to other sectors of the host economy due to increased taxes and
charges.  To use the current jargon, attempts to tilt the playing field will
only hurt those who do the tilting.

If economic rationalism is right, the US should be cheering the Europeans
on.  Encouraging even greater subsidies for Airbus will result in an even
weaker Europe to whom the US will sell even more Caterpillar dozers and
Xeroxes and Compaqs and Westinghouse generators - only the number of
Boeings will reduce.  Well, we can't have everything...

But maybe there are some flaws in the theory!  The Americans seem really
upset at these Airbus subsidies.  And the Europeans seem intent on
committing fiscal suicide by continuing to assist their industry.

No, there couldn't be!  That would mean that the whole push to free trade
is just a scam by the strong to exploit the weak.  No, they wouldn't do that
..would they?

Graeme Cant