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Subsides were used to aid Boeing gain a first mover advantage into the emerging airline industry. They were given tax grants for R & D spending or money to develop military technology that could be transferred to civilian projects. Airbus, on the other hand, was able to enter the market through a $13.5 billion subsidy from governments in France, Great Britain, Germany, and Spain. According to a 1992 agreement between EU-US and the WTO "up to 33 per cent of the program cost was to be met through government loans which were to be fully repaid within 17 years with interest and royalties, but only if the aircraft was a commercial success. These loans are held at a minimum interest rate equal to the cost of government borrowing plus 0.25%, which would be below market rates available to Airbus without government support." Thus, without this subsidy Airbus would have never been able to break into the world market and compete with Boeing at such a strong level. It is only recently that......
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Title: Boeing Vs Airbus - Subsidies
Approximate Word Count: 761
Approximate Pages: 4 (250 words per double-spaced page)
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