Aerospace |
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Boeing McMerger
Approaches US Approval Milestone This Week
Some observers point to last week's travel to Brussels by one FTC commissioner as evidence of the impending approval. Commission member Mary Azcuenaga admitted that she met with the European Union's competition commissioner Karel Van Miert during her visit, but declined to discuss specific details of their conversation. The real deadline, however, is purely legal. U.S. law requires action by the FTC within 20 days of submission of materials by the involved companies. That deadline is up July 1. While extensions can be granted, none are expected, despite the volumes of materials submitted by Boeing and McDonnell Douglas. For its part, the EU is expected to privately share its findings on the merger on July 4th with other members of the 15 country European Union. News reports over the last two weeks have suggested that Boeing is willing to relax its exclusivity agreements with American, Continental and Delta in exchange for a favorable ruling by the European Commission. The EC has maintained that the exclusive contracts were a major sticking point in its consideration of the merger. Airbus Industrie has loudly complained that the exclusive deals not only lock it out of the market with the specific airlines, but are also illegal.
Interestingly, no complaints against the proposed merger
have been voiced from other parts of the world. Airbus should
pay attention to the fact that Asian countries have been
noticeably quiet. While the European consortium has attempted to
co-opt potential Asian competitors by forging alliances, such as
their efforts with the Chinese on the 100-seat Asia Express,
Airbus might do better to keep their eye on their new partner,
considering China's avowed intention of becoming a producer of
commercial aircraft. It's easy enough to contend that there will
soon only be two producers of large commercial aircraft, but the
reality is, there will be three within 10 years. As China flexes
its new economic - and soon aerospace - muscle, the new player
may well be the one to watch.
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