Boeing Versus Airbus

Boeing and Airbus have been in competition with each other for years, but, according to Therese Leung, in 1996 when Boeing and McDonnell Douglas merged, Boeing and Airbus became the only two large aircraft manufacturers making a duopoly between them that has created a heated competition between the two companies. An article on Watchingamerica.com discusses the complaints that the two companies have filed against each other because of the predicament. In 2005 Airbus filed a complaint with the World Trade Organization due to the subsidized money awarded to Boeing by Washington.

While Boeing has been in business much longer than Airbus, Airbus has given Boeing a run for their money and have had competitive numbers with them for years. According to International Business Times, Boeing only sold 13 more airplanes than Airbus in 2012, however, where Boeing delivered 601 planes 1,203 were originally ordered. Airbus, Meanwhile delivered 588 planes out of 833 ordered closing on more than half of their deals unlike Boeing who closed on barely 50% of their orders. Another advantage that Airbus holds is their price, Boeing might be selling more planes but Airbus is making more off of theirs. According to CNN the price of a Boeing 747-B is $317 million compared to the Airbus A380 which sells for $375 million. The 747 and the A380 are not the only planes that these two companies have in competition, frankly they pretty much go blow for blow but one of the biggest upcoming duels will be the competing 777X and the A350. According to Reuters, Boeing has lost several deals to Airbus in the Asian markets and is hoping to hold onto their remaining contracts but worries, the 777X won't be released until 2020 while the A350 is out in 2015.

In some ways it may seem that Airbus may have the upper hand but on then at times it appears that Boeing does, I don't believe that the relationship between the two will ever be a matter of who comes out on top but will continue to be a cycle that move up and down and where one company may have the upper hand in one area, the other company will be successful in another, an example of this would be the amount of planes that the companies have sold and how many are still flying. According to International Business Times, Boeing has delivered 15, 328 planes since 1974 and Airbus has only delivered 7,877, however only 9,091 of Boeing's airplanes are still flying while Airbus has 6,430 still in operation.

If there is ever to be determined a victor among the two companies it may boil down to their values and how they conduct their business, not who can sell more planes. According to Forbes, Airbus continues their manufacturing with the belief that smaller regional planes that fly connecting flights between smaller cities, is the future of the industry. Boeing operates on the notion, however, that customers should be able to fly where they want to go, at the time they want to go there. In other words there should be no middle man, just one plane that goes from point A to point B. It will be interesting to see how this pans out in the next few years, if there will continue to be an increase in regional flights or if more people prefer to fly on larger, point to point aircraft. Personally I believe that domestic flights will continue the trend of smaller regional flights where international travel will provide for the larger flights that Boeing wishes to provide. In the end, I foresee these two companies battling each other for a long time.

Babej, M., & Pollak, T. (2006, May 24). Boeing versus airbus. Retrieved from http://www.forbes.com/2006/05/23/unsolicited-advice-advertising-cx_meb_0524boeing.html

Boeing 747-8 vs. airbus a380 -- the airline giants face off. (2011, December 17). Retrieved from http://travel.cnn.com/explorations/life/boeing-747-8-and-airbus-a380-death-match-152563

Govindasamy, S., & Hepher, T. (2013, October 8). Airbus versus boeing japan battle switches to ana. Retrieved from http://www.reuters.com/article/2013/10/08/us-airlines-japan-boeing-airbus-idUSBRE99713N20131008

Leung, T. (2013, June 3). Duopoly: Boeing and airbus. Retrieved from http://prezi.com/urpxd0mtsr_8/duopoly-boeing-and-airbus/

Mahapatra, L. (2013, June 15). Boeing vs. airbus: Who is selling more planes now and in the past [infographic]. Retrieved from www.ibtimes.com/boeing-vs-airbus-who-selling-more-planes-now-past-infographic-1308499

It's airbus vs. boeing: Largest trade war in wto history may have just begun . (2005, June 01). Retrieved from http://www.watchingamerica.com/eldiarioexterior000004.html

General Aviation in China

While the rest of the world has been enjoying the benefits of General aviation for years now, GA is the one thing that China is behind everyone else on. There are many reasons that the GA industry has not grown in China including restrictive regulations, limited airspace, and heavy taxes on GA, but, according to the Wall Street Journal, one of the biggest reasons is that the airspace in China is controlled mainly by the military. In the last few decades, however, China has been working to bring their GA sector up to par with the US and have seen considerable growth in the last several years, and several US manufacturers have joined forces with Chinese businesses to make this happen.

According to Booz & Co. some of the companies that have created joint ventures in China include Harbin, Embraer, and Cessna, who is working with Shenyang Aircraft Corporation in developing a 162 Skycatcher for the Chinese market. American manufacturers have made growth easier in China, joint ventures between companies make funding easier and help young Chinese companies access to experience. But it's not just US manufacturers that are helping the industry grow, the Friends of China GeneralAviation say that China has become aware of the potential for GA benefits, including emergency transportation, and business aviation, many of the benefits that General Aviation can provide are needs that the Chinese are in need of due to their booming economy, not only are there more business needs because of growing companies but more and more people are able to afford to fly as a hobby in China. According to Friends of Chinese General Aviation China has been adopting many US policies and regulations for their GA program but are still working out issues with their airspace which might continue to slow down their growth if they are unable to come to an agreement with the Chinese military. While GA is growing in China is creates many opportunities for them it does benefit us as well, for one, manufactures are able to tap into a new market and generate sales, and consequently those companies opening shop across seas creates jobs. According to Airbus, Airbus China is the only Airbus training facility in Asia Pacific and creates jobs for trainers, and engineers alike. Because the facility is the only one in the area every company is the area that flies Airbus sends their, Maintenance, Flight, and Cabin crews to Airbus China for training which not only creates revenue for the American manufacturer but creates good training opportunities for American pilots going to China looking for work in their growing commercial industry. While China is booming and their GA sector is growing, it is American companies that are helping them along and benefitting from their need for good aircraft and training.

Airbus. (n.d.). Opportunities in china. Retrieved from http://www.airbus.com/work/experienced-candidates/opportunities-in-china/

FCGA. (n.d.). General aviation in china —an overview. Retrieved from http://www.gochinaga.com/GAInChina.htm

Jackson, C. (2012, May 09). China's general-aviation flight of fancy. Retrieved from http://online.wsj.com/news/articles/SB10001424052702304451104577391650977428024

MacCorkle, J., & Wong, T. (2009). General aviation in china seizing growth opportunities. Retrieved from http://www.booz.com/media/file/General_Aviation_in_China.pdf

Obama plans to raise taxes on Corporate Aviation

In years past if business executives needed to travel they were required to hop in line at the airport just like everyone else. They would spend all day checking in to the airport flying to their meeting and getting on the next plane home over the course of 24 hours. Corporate aviation has made it possible, however, for businesses to fly to multiple meetings in a day in multiple locations and still be home in time for dinner; it eliminates the long security lines, the baggage claims, the planes can land in smaller airports with less traffic, this brings business to more airports, smaller communities and FBO’s. The general image of corporate flying is one of needless, luxurious travel but the general public doesn’t know the truth behind corporate flying. Attending meetings in multiple states in the same day opens up the opportunity to close deals at a much quicker pace than was previously possible. Where one person might only be able to fit so many commercial flights into week, corporate aviation has made it possible to fly anywhere anytime at the drop of a hat and even hold meetings on the plane itself. Corporate aviation is not only an important part of the economy but it is an essential part of it according to GAMA/IAMAW corporate aviation lends to 60% of the United States exports and USA Today reports that it creates 1.2 million jobs and generates $150 billion per year.

            Recently Corporate Aviation has come under attack from the President who wishes to repeal a law that he signed a few years ago that gives Business Aviation programs the right to use Accelerated Depreciation on newly bought aircraft, which means that for accounting purposes aircraft depreciate faster in the beginning which allows companies larger deductibles. This benefit was part of the stimulus package that the President signed in 2010 to help encourage economic growth but recently the President has changed his mind, according to CNS News the President is under the opinion that companies who can afford to pay for their own aircraft can afford to pay more taxes and if unwilling to do so it will be America’s children who suffer for it through higher tuition and cuts to education.

            While the country’s deficit is growing larger, the President’s view on raising taxes on corporate aviation was not received well by the industry. According to USA Today Ed Bolen the CEO of NBAA sent a response to the President reminding him of the jobs that corporate aviation has created across the country, and according to the EAA Pete Bunce, the President of GAMA would like to know how the Obama administration plans on meeting its goal of doubling exports if it plans on cutting into the industry that is responsible for the majority of exported goods.

            In my opinion the tax cuts are not only a bad idea, but are not even worth it. USA Today states that the cuts will only produce $3 billion over 10 years and in that same amount of time the deficit is projected to be $7.2 trillion. I believe that the cuts are a drop in the bucket and would cause more harm to the industry and the economy than it would benefit it. Not to mention that as accelerated depreciation goes, the largest deductibles for companies are in the first few years, as depreciation slows later in the aircraft's lifespan the deduction will increase generating more tax dollars. If you ask me, the money needs to come from somewhere else. 

Eaa applauds gama/iamaw response to attack on aviation industry. (2011, June 29). Retrieved from http://www.eaa.org/news/2011/2011-06-29_gama.asp

Fernholz, T. (2011, June 29). Obama’s taxing corporate jet policy. Retrieved from http://www.nationaljournal.com/obama-s-taxing-corporate-jet-policy-20110629

Lucas, F. (2011, June 30). Obama for corporate jet tax break before he was against it - see more at: http://cnsnews.com/news/article/obama-corporate-jet-tax-break-he-was-against-it

Wolf, R. (2011, June 30). Obama targets private jets, big oil. Retrieved from http://content.usatoday.com/communities/theoval/post/2011/06/obama-targets-corporate-jets-hedge-funds-big-oil/1

UAV's and Commercial Aviation

UAV’s haven’t had much use outside of military application, until recently, there are many that are starting to realize their potential for use and are seeking to put them to work in the public sector.  The use of UAV’s for commercial purposes has not been widely accepted by the public and has therefore gotten off to a slow start. Many feel that the UAV’s will be used to impede on their privacy, some have concerns that the aircraft will be able to be hacked and used for illegal purposes. According to USA Today, however, a big part of the reason that commercial use of UAV’s hasn’t happened is due to safety. There have been few regulations yet concerning these aircraft but according to Aviation Week the FAA has been using regulations concerning manned aircraft as a basis for unmanned aircraft regulations. One of the things that has been done to allow some use outside of the military is the restricted use category. The FAA allows UAV’s to fly in certain, specified areas, and the aircraft must remain under the same configuration that it is certified under, in other words, it must do the work that it was built to do and only that work.

            I believe that part of the reason that the public has not felt comfortable with the public use of these aircraft is because they are unaware of their potential. An article on Live Science compiles a list of potential uses for the UAV and part of the way through the article they mention using them to take pictures of unknowing celebrities. I believe that this would be a misuse of the aircraft's capabilities and will only instill more fear in the public, instead we need to educate the public on other UAV applications. Aeronautics is a company that develops UAV technologies and have used the UAV’s for several projects, they report using them for, Pipeline Monitoring & Oil and Gas Security, Wildfires Detection and Management, TV Broadcast relay by UAV technology, and Pollution Monitoring. While it might be taking time for them to merge into the commercial sector I believe that as we find more practical uses for the aircraft that we will see them more and as the public learn more about them their fear will subside.

 

           

            While there

Commercial uav's. (2007). Retrieved from http://www.aeronautics-sys.com/?CategoryID=259

Lallanilla, M. (2013, March 24). Cool uses for drones. Retrieved from http://www.livescience.com/28136-uses-for-drones.html

Lynch, T. (2013, september 24). Commercial drone market stirs excitement (and worry). Retrieved from http://www.usatoday.com/story/tech/2013/09/24/reviewed-commercial-drones/2857355/

Warwick, G. (2013). Faa type certifies first uas for commercial ops. Retrieved from http://www.aviationweek.com/Article.aspx?id=/article-xml/asd_07_26_2013_p01-01-601023.xml