On the evening of July 1, 2022, China’s three major aviation groups announced that they had signed agreements with Airbus on the same day to purchase a total of 292 a320neo series aircraft from Airbus, with a total price equivalent to more than 240 billion yuan. This is the first time in nearly three years that China’s civil aviation industry has announced such a large-scale passenger plane order. By the end of 2020, the number of Airbus aircraft in active service in China accounted for 51% of the domestic civil aviation market, and China has surpassed the United States to become the largest single country market for Airbus.
After World War II, American aviation giants such as Boeing have always occupied an overwhelming position in the global commercial aircraft market, while commercial aircraft from European countries have been unable to withstand the competitive pressure of the United States and have been losing ground for a time.
As a strategic enterprise, how did Airbus rise in the late stage?
Article ? Li Wei, Zhang mengkun, School of international relations, Renmin University of China
This article is reproduced from the wechat official account “cultural aspect” (id:whzh_21bcr), the original was first published on July 2, 2022, and the original title was “the political basis of Airbus’ rise – technology integration, market expansion and the growth of strategic enterprises”, which was originally published in the 11th issue of world economy and politics, 2021.
Aviation industry is a bright pearl in the history of human industrial civilization, and it has always been a must for industrial competition among large countries. In the era of small propeller aircraft before World War II, the United States and major European countries stood on the same starting line, and the two sides have long been neck and neck in the field of aviation industry. However, after the end of the Second World War, with the aviation industry entering the era of jet aircraft, the balance of competition between the United States and Europe has changed significantly: American aviation giants such as Boeing, McDonnell Douglas and Lockheed have gained an overwhelming position in the global commercial aircraft market.
In 1970, major European countries jointly launched a large passenger aircraft project called “Airbus” (hereinafter referred to as “Airbus”), trying to turn around the competitive decline of European civil aviation industry with the efforts of many countries. From 1970 to 2020, Airbus took half a century to shake the hegemony of the United States in the field of large-scale commercial aircraft manufacturing and reshape the competitive pattern of the global civil aviation industry. Under the macro background of the decline of the overall industrial competitiveness in Europe, Airbus has become an important example for European enterprises to defeat their American counterparts and a precious symbol of strength in Europe in the field of high-end industry.
Airbus’s success is not just a wonderful commercial “counter attack”, it stems from the solid political foundation laid by European integration. European integration has comprehensively improved the ability of major European countries to jointly provide technical and market support for Airbus, which is the fundamental reason for Airbus to overcome its late developing disadvantages and achieve the rise against the trend in the incomplete competitive market. The experience of Airbus’ rise provides a typical case for the construction of political economy theory about strategic enterprises, and has important practical significance for the development of relevant strategic enterprises in China.
European Union and the rise of Airbus: a two-dimensional analysis framework of technology market
Compared with the first Boeing, the second Airbus is one of the few strategic enterprises in the world without a clear nationality. European integration has greatly enhanced the industrial support capacity of European countries for the manufacturing of large commercial aircraft, mainly reflected in the support of technology integration and market expansion, which in turn provides a strong boost for Airbus to surpass the technological and market advantages of existing oligarchs and realize the late development and rise. Airbus’s practice has profoundly proved that under the background of increasingly fierce competition among big countries, European countries can only get a place in strategic industries and strategic fields (such as currency, security, etc.) if they unite.
?1? Technical level and market scale: two foundations for the growth of civil aviation industry
There are extremely high barriers to entry in the civil aviation industry. Two crucial factors have blocked the vast majority of countries in the world from the threshold of large passenger aircraft manufacturing: one is the technical level, the other is the market size.
In terms of technology level, aviation manufacturing industry is a typical knowledge intensive industry. The integration and innovation ability of technology, especially complex technology, plays a decisive role in aircraft development. There are extremely high technical requirements in the three links of model design and development, component production and assembly, and aircraft flight test and certification. The test is not the single technical level, but the technical ecosystem of the whole industry, including talent reserves, infrastructure equipment, and innovation environment.
The high technological content of commercial aircraft manufacturing leads to two direct consequences:
First, the R & D capital investment is very huge. Although the civil aviation industry is a “money making industry”, it is also a “money burning industry”;
Second, the development cycle is very long, which is a typical “slow heating industry”. The whole process of the design, production, assembly, flight test, certification and delivery of an aircraft takes at least a few years, or more than a decade or even decades.
In addition to the high technical level requirements, the size of the market also has a significant impact on the success or failure of a certain model and aircraft manufacturer. First of all, whether the aircraft manufacturers can obtain a large market scale is directly related to whether they can realize the scale effect, share the huge R & D costs, and then obtain cost advantages. The R & D and production of aircraft is a process of gradual cost reduction. There is an important “balance of payments”, that is, aircraft manufacturers must sell a certain number of aircraft to recover the development cost of a certain type of aircraft, and then invest part of the surplus funds in a new round of Technology research and development.
Secondly, the customer base of commercial aircraft is highly viscous. Obtaining more market share in advance means occupying a stable customer base, which is convenient for further expanding the market scale. Due to the long service life of aircraft (usually more than 20 years), in order to avoid the increase of later maintenance and other costs, airlines often show consumer loyalty to a certain type of aircraft, and have the characteristics of “locking” or “path dependence” in the choice of aircraft manufacturers.
?2? European integration and improvement of industrial support capacity
The process of European integration has greatly improved the support ability of European countries for commercial aircraft manufacturing in terms of industrial technology integration and product market expansion, both of which are tests of national economic diplomacy ability. Therefore, the late development and rise of European civil aviation industry, especially the manufacturing of large commercial aircraft, has gone far beyond the scope of industrial economics, which involves a more ambitious international political economy analysis framework.
The industrial support ability of European integration for commercial aircraft manufacturing is improved through two ways:
First, European integration has resolved the main geopolitical contradictions in the region, enhanced the trust among Member States, cultivated the habit of cooperation among countries, and thus enhanced the willingness of countries to cooperate in strategic and sensitive industries. In addition, political mutual trust also facilitates the distribution of industrial interests between countries.
Second, European integration has created a variety of inter state cooperation mechanisms and supranational institutions, which further facilitates the conduct of cooperation. From the European Coal and steel joint venture to the European Community and then to the European Union, various supranational mechanisms and arrangements as well as the common strategic agenda have greatly enhanced Europe’s domestic and external collective action capabilities, such as financial investment and market expansion.
In terms of technical support, the role of the European integration process is to encourage major European countries to overcome techno nationalism, form a stable division of labor system in the R & D and production of large passenger aircraft, integrate and build the industrial chain and Technological Ecology of commercial aircraft manufacturing with European (regional) rather than nationalist thinking, and give full play to the joint force effect of many countries. Transnational technical cooperation in sensitive industries is a barometer of political relations between countries. Moreover, the constantly strengthened supranational mechanism in the European region promotes the process of European integration from trade and monetary integration to technological integration by launching joint innovation projects and formulating common science and technology policies.
In terms of market support, European integration has greatly improved the ability of European countries to support late developing manufacturers in exploring local markets and exploring markets outside the region:
First, the direct economic consequence of European integration is the establishment of a unified market, which has greatly increased the size of the internal market.
Secondly, European integration has politically enhanced the ability of major European countries to expand the passenger aircraft sales market outside the region through economic diplomacy. Aircraft, especially large passenger aircraft, is a highly capital intensive product. Many countries adopt the centralized batch procurement mode to enhance their bargaining power against manufacturers. Moreover, many airlines are owned or supported by the government. The sale of passenger aircraft is not only a commercial transaction, but also a “political transaction”, which requires the manufacturer’s home country to come to the front and provide political assistance for aircraft sales through economic diplomacy.
Based on the organizational structure of the enterprise, Airbus’ growth history can be divided into two stages:
(1) Airbus group as a multinational enterprise consortium from 1970 to 2000;
(2) Airbus as an independent business entity from 2001 to 2020.
Next, this paper will use the above-mentioned two-dimensional technology market analysis framework to comprehensively explain how to improve the industrial support ability of European countries to Airbus in these two stages of European integration, so as to promote Airbus to surpass its competitors’ first mover advantage and realize the rise of later development.
The development of European integration and the growth of Airbus (1970-2000)
Faced with the defeat of the European commercial aircraft project, almost at the same time as the establishment of the European community, Britain, France and Germany signed a memorandum in September 1967, deciding to jointly build a new Airbus A300 project. It was the first delivery of Boeing’s narrow body airliner B737, which became the most popular aircraft in the market in history, and the super large wide body airliner B747 was about to appear. This memo shows the strong sense of crisis in European countries and the urgency of unity and self-improvement under competitive pressure.
On December 18, 1970, Airbus industrial group was officially established. It is not an independent multinational company, but a multinational enterprise consortium. This has been proved to be the starting point of a new era of European civil aviation industry.
?1? Technical support: the construction of multinational division of labor mode and the expansion of government financial investment
As an aircraft brand shared by many countries, Airbus represents the firm commitment of major European countries to “Technology Europe”, that is, to view the development of large commercial aircraft from the perspective of Eurocentrism rather than national centrism. In 1977, Raymond Barr, the then French Prime Minister, even claimed that “any aircraft in France should take off within Airbus group”.
Figure 1: annual deliveries of large commercial aircraft in the United States and Europe, 1958-1968
When Airbus group was founded in 1970, the British government did not participate as agreed. In the face of this major change, France and Germany did not flinch, but showed their determination to unite sincerely. Germany took over the work of developing and assembling wings, and partially outsourced this work to hawker Siddeley, a British private company. The company bears 40% of the R & D costs, while Germany bears the remaining 60%. In this way, hawk Sidley participated in the Airbus project as a system subcontractor, but it is not a full member of the Airbus group and has no voting rights. During the negotiation of work assignment of a300b project, France, Germany and hochsidelli aimed to achieve cooperation. The work assignment was mainly based on the technical experience and foundation of each actor, and each actor also fully mobilized their own resources to make the result of work assignment beneficial to themselves.
Table 1: work distribution of Airbus a300b project
Since then, the work distribution of A310 has basically maintained the division of labor pattern of a300b project. So far, Airbus group has created a new aircraft development mode of multi-national division of labor and cooperation. Under this mode, the cooperative companies of different countries jointly undertake the design, research and development and production and manufacturing responsibilities of different parts of the aircraft. This aircraft has no nationality, only continental nationality. This intra industry division of labor is not the spontaneous formation of the “invisible hand” of the market, but the product of intergovernmental agreements. It highly depends on the contract between governments, and this political contract eventually evolved into a stable habit of division of labor. In this regard, some scholars pointed out that the A300 and A310 absorb the technical capabilities of almost the whole Europe in the field of civil aviation industry.
In January, 1979, the British government expressed its support for British Aerospace to participate in the A310 project and provided a low interest loan of £ 50million for technology research and development. Britain’s positive attitude was positively responded by France and Germany. Finally, British Aerospace Corporation acquired 20% of the shares of Airbus group on behalf of the British government, while the shares held by France and Germany decreased to 37.9% respectively, and the equity structure of Spain remained unchanged. This major adjustment of the shareholding structure marks the return of the UK to the Airbus project as a full member state, and the multinational cooperation pattern of Airbus “four carriages” has also been fully formed.
Table 2: equity changes of Airbus at the beginning of its establishment (unit:%)
After continuous adjustment, the division of labor mode of Airbus aircraft development has gradually stabilized. Germany and France are responsible for the fuselage, Britain is responsible for the wings, Spain is responsible for the tail wings, and finally the final assembly is carried out in Toulouse, France, which reflects France’s position as a “locomotive” in Airbus projects. This stable mode of division of labor and cooperation is the result of the game among Member States and the continuous strengthening of strategic mutual trust among European countries. Although work assignment sometimes causes friction between Airbus’ partners and Member States, it promotes the R & D efficiency and technological innovation of aircraft development, ensuring that Airbus aircraft can integrate the wisdom of Europe.
In addition to the main body parts and design assembly completed within Airbus group, the engine and landing gear of Airbus aircraft are purchased from suppliers outside the group, among which rollsroyce of the UK is the main engine supplier of Airbus wide body airliner; The engines of narrow body airliners are mostly from CFM international, a joint venture between the United States and France, while the landing gears are mostly provided by SaiFeng group of France and Liebherr of Germany. With Airbus group as the center, the European civil aviation industry has formed a complete and orderly industrial ecosystem and supply chain, so as to jointly support the European brand developed by large passenger aircraft.
Table 3: five early Airbus models
In addition, the strategic mutual trust among European countries has also greatly strengthened the willingness and ability of the governments of Airbus member countries to provide R & D financial support for Airbus projects. As a business consortium, Airbus group itself does not have independent financial capacity and needs a lot of financial support from Member States, which is also the main reason why the United States launched a subsidy complaint against Airbus in the 1980s. The amount of government assistance received by Airbus is scattered in different documents and reports, and these figures vary greatly. The convergence of the financial forces of Britain, France and Germany has helped Airbus withstand the continuous financial deficit in the previous 20 years, and will unswervingly focus on the research and development of different models.
Table 4: financial support of France, Germany and Britain to Airbus (unit: US $100 million)
?2? Market support: procurement support in the region and market defense outside the region
The most important achievements of European integration in the economic field during this period are the comprehensive integration of the market and the continuous expansion of the scale of the single market, which provide a foundation for Airbus to cultivate a crucial start-up market, so that Airbus can have the strong support of the huge local market in the face of the high market entry barriers created by the American oligarchy, helping it through a difficult growth period before the break even point.
Airbus’ Member States jointly provided the initial procurement support for Airbus aircraft. The start-up users of Airbus’ early models were all national airlines of Member States, which provided Airbus with the first ticket to enter the market. When signing the Airbus establishment agreement, Member States established a basic principle, that is, the state-owned airlines of Member States have the obligation to take the lead in purchasing Airbus aircraft. When the A300 project was launched, Germany, Britain and France each promised that their national airlines would buy 25 A300 aircraft, and promised not to participate in other projects competing with Airbus and not to support their competitors. Throughout the 1970s, most Airbus aircraft were purchased by airlines in four member countries.
After decades of testing in the post-war air passenger transport market, the single channel narrow body aircraft is recognized as the model with the largest market demand. If Airbus cannot make a difference in this type of passenger aircraft market, it is difficult to really stand on its feet. In 1987, the A320 made its first flight, aiming to benchmark the Boeing B737. As a latecomer, the A320 is 20 years later than its rivals. Whether it can “grab food from the tiger” directly determines the success or failure of the entire Airbus project. Since B737 was quite mature at that time, to break the path dependence of the market on B737, we must rely on loyal local supporters.
As early as at the 1981 Paris air show, Air France announced that it would order 25 A320 aircraft, while retaining the right of first refusal of 25. When the A320 project was officially launched in 1984, Airbus had confirmed orders for 80 aircraft, all of which came from European countries. These initial orders provide strong market support and important confidence support for the continuous promotion of Airbus project. At the Paris air show in 1987, 10 customers including Air France and Lufthansa promised to order 130 a330/a340 and its derivatives. This is the largest order in Airbus’s history, marking that Airbus has gradually passed the early difficult market cultivation period and began to become an important competitor in the global passenger aircraft market.
In the 1990s, European airworthiness standards were completely unified, which facilitated Airbus’ expansion in the broader European market. Civil aircraft need to be supervised by a set of airworthiness standards. The unification of airworthiness standards is an important part of the unification of European unified market rules. In 1992, the European Community countries established the Joint Aviation Administration (JAA) to uniformly formulate the aviation regulations and technical and safety standards of Member States. Ten years later, the United aviation administration was upgraded from the association of the airworthiness authorities of Member States to the European Aviation Safety Agency (EASA), a supranational organization under the leadership of the European Union, which centrally exercises part of the civil aviation management sovereignty of Member States, marking that Europe has formed an airworthiness management system with the same voice as the Federal Aviation Administration (FAA) of the United States, further improving the integration of the European aviation market, Thus, it is more conducive for the European market to accept the aircraft of local manufacturers.
As of 1993, Airbus’ share in the European market has significantly exceeded its performance in the U.S. market in three segments: short-range narrow body aircraft (A320), long-range large aircraft (a330/a340) and medium-range medium aircraft (a300/a310) (see Table 5). It can be said that in the first 30 years of Airbus’ growth, the strong support of the European domestic market helped Airbus go through the climbing period of growth, and European integration promoted the purchase of Airbus aircraft by European domestic airlines.
In the 1980s, as Airbus continued to expand its market in the United States, the United States began to change its attitude of contempt for Airbus, frequently accused European countries of violating the general agreement on Tariffs and trade (GATT) in their R & D assistance to Airbus, asked the European community to restrict this and threatened to appeal to GATT. In the critical period of Airbus’ growth, trade frictions between the United States and Europe pose a serious challenge to Airbus’ survival, because the U.S. market is crucial to Airbus’ development.
In the process of coping, European countries have always shown extremely resolute unity to deal with the pressure of the United States with collective strength. On behalf of Airbus, the European Community negotiated the subsidy issue with the U.S. government, which means that European countries regard the subsidy dispute of Airbus as a European problem, not just a problem of one or several countries. In April, 1992, the United States and Europe signed the “Airbus agreement”, which temporarily resolved the differences between the two sides through appropriate restrictions on subsidies. The first round of aircraft subsidy dispute between the United States and Europe was settled by reconciliation between the two sides without a trade war.
In this process, the European community took the common market as the weight, and the United States did not make up its mind to fight an “aircraft trade war” with Europe, because many European airlines still bought a large number of American aircraft at that time.
The European Union has not only demonstrated its strong industrial defense ability in the European and American subsidy dispute, but also strongly intervened in the merger of Boeing and McDonnell Douglas on the grounds of antitrust, which is an active offensive launched by the European Union against the United States in the field of civil aviation industry. Although the EU failed to prevent the merger of Boeing and McDonnell Douglas, by intervening in this event and forcing Boeing to make a major compromise, the EU demonstrated its strong economic diplomacy ability and sent a major message to the world to resolutely help Airbus defend the order of free competition. In the competition of European and American civil aviation industry, the European Union is the strong political backing of Airbus.
With the collective support of European countries, Airbus’s order volume and market share increased rapidly in the next 10 years after 20 years of accumulation from 1970 to 2000. In 1994, Airbus’ annual order volume reached 125, surpassing Boeing’s 111 for the first time. Around 1995, Airbus achieved its initial strategic goal of occupying 30% of the global market, although the realization of this goal was more than ten years later than expected. In 1996, Airbus was considered to have achieved profitability and successfully crossed the life and death breakeven point.
Although there is still a gap from Boeing, Airbus, as a multinational joint enterprise group, has spent 30 years to build five major models, which not only successfully survived in the commercial aircraft market, but also firmly grasped the pace of market leaders. Through the cooperation and efforts of nearly a generation of European leaders, Airbus was established on the basis of mutual respect and support among Member States, integrating the advantageous resources of France, Germany, Britain and Spain, and finally building this historic industry leader.
Figure 2: annual order volume of Airbus and Boeing from 1989 to 2000
The upgrading of European integration and the summit of Airbus (2001-2020)
In the 21st century, the technology research and development and market share competition between Airbus and Boeing has entered a new historical stage. In fact, the competition between the two enterprises has become a competition in the civil aviation industry between the two major economies of Europe and the United States, affecting a more intense political competition among major countries. In this change, the continuous development of European integration has built a stronger political backing for Airbus and Boeing to compete for the hegemony of the global civil aviation industry.
?1? Technical support: the strengthening of multinational division of labor and the formation of diversified financing framework
In the technical competition with Boeing, Airbus’s biggest achievement in the model development is the A380 and A350 two new generation wide body aircraft. Their delivery and use marks that Airbus has formed an all-round and seamless competitive relationship with Boeing in the aircraft model, and their successful development is the result of the full cooperation of major European countries.
The A380, known as the “air giant”, is the largest aircraft project in human history, known as the “flagship product of the 21st century”, which aims to challenge the leading position of Boeing B747, known as the “air Queen”, in the long-distance air passenger transport market. Although the A380 finally suffered a “Waterloo” in business, it achieved amazing success in technology. The A380 shows that Airbus has the technological strength to develop the world’s most advanced super large passenger aircraft, setting an important benchmark for the future aviation industry.
In contrast, Airbus’s latest aircraft A350 has achieved both technical and commercial success. It is the product of Airbus’ competition with Boeing’s “Dreamliner” B787. At the end of 2014, the first A350 was delivered to Qatar Airways. By the beginning of 2020, when the COVID-19 broke out, Airbus had delivered 350 in five years, marking that the A350 has gradually become a commercially successful model. A350 inherits and develops a large number of technical resources originally developed for A380, and pushes the characteristics of Airbus aircraft to a new level in terms of autopilot and model versatility.
Airbus combines the joint efforts of multinational technology research and development and production and manufacturing to jointly complete the development of aircraft. This advantage forces Boeing, which has always adhered to the vertical integration mode, to reform and subcontract the design and manufacturing of the wings of its latest model B787 to Japan, while Boeing “has never purchased a wing externally” before. With the support of the Japanese government, the three major heavy industry companies in Japan “completed this task with the attitude that B787 is their own product”. Moreover, new composite materials are widely used in the body of B787, which is also attributed to Japan’s strong technical strength in this field to a large extent.
Since Airbus has become a public company with scattered shares after the reform of its organizational structure, and its state-owned shares are increasingly diluted, the direct support of the government is contrary to market equity and inconsistent with the basic rules of the WTO. In this case, European countries provide financing support to Airbus in a more diversified way, including through the regional multilateral development bank – the European investment bank. It is worth mentioning that the R & D loan provided by the European investment bank to Airbus was recognized as legal by the WTO.
Table 6: Airbus’ loan projects in the European investment bank since 2000
Moreover, the European investment bank has also provided R & D capital loans to Airbus’ important suppliers and partners. In 2008 and 2015, the European investment bank provided loans of € 250million and € 280million respectively for the Trent XWB engine project of RORO for technology research and development including the engine. Considering the important position of aeroengine in aircraft components, especially the engine is the exclusive power of A350, the R & D support for RORO is the support for Airbus. In addition to engine suppliers, the European investment bank has also funded other important supporting aviation industry projects, becoming an important financial supporter of the European aviation industry system.
In addition to the above support channels, major industrial strategies and policies at the EU level also provide a strong knowledge supply for Airbus’ technological development. With the development of European integration towards the direction of diplomatic and security alliance, the EU began to promote supranational cooperation initiatives in some originally relatively sensitive industrial areas, including the common Aerospace policy and the defense industry policy.
?2? Market support: dealing with subsidy disputes and launching “aircraft diplomacy”
The market competition between Airbus and Boeing has also entered a white hot stage. As the solid political backing of Airbus, the European Union and its major member states have launched active economic diplomacy to escort Airbus’ market space. They not only fought the second round of subsidy war with the United States, but also actively ran for Airbus to expand new overseas markets, especially in the fastest-growing Asian market, and even caught up.
The new generation aircraft R & D competition launched by Airbus and Boeing in the 21st century requires massive capital investment, which once again exposes the problem of government subsidies. In 2004, the US government accused European countries of providing excessive subsidies to Airbus in the A380 project, in violation of the 1992 bilateral agreement, which marked the emergence of a new round of US European subsidy disputes. The US European aircraft subsidy dispute eventually evolved into a “tariff war” between the two sides in 2019 and lasted for more than a year. It was not until the Biden administration came to power in 2021 that the two sides reached an agreement to end the 17 year long second round of US European aircraft subsidy dispute.
In addition to resolutely defending Airbus in the subsidy dispute, European heads of government and diplomats also frequently act as Airbus “salesmen”, using the power of national economic diplomacy to help Airbus expand its markets outside the region. In the 21st century, the civil aviation market in the United States and Europe is generally saturated, and airlines have formed a fixed purchase preference for aircraft models. The emerging Asian market, especially the rapidly developing Chinese market, has become a “new battlefield” for Airbus and Boeing. The leaders of major European countries attach great importance to “aircraft diplomacy” towards Asian countries, especially helping Airbus promote the two new A380 and A350 models, and have achieved very positive results.
In the “aircraft diplomacy” of European countries, China is the most important target, because China is becoming the largest buyer of commercial aircraft in the international market. At the end of the 20th century, Airbus’ global market share was close to 50%, but its market share in China was only 30%. The Chinese market has long been the weak link of Airbus’ global market.
Therefore, “aircraft diplomacy” has become an important part of the economic diplomacy of major European countries to China. In October, 2006, when the then president of France Jacques Chirac visited China, under the promotion and witness of the leaders of China and France, China and Airbus signed a framework agreement for ordering 150 A320 series aircraft and a letter of intent for ordering 20 A350 wide body aircraft in Beijing, with a total value of more than $10billion. This was not only the largest aircraft order Airbus received in the 20 years since it entered the Chinese market, but also the largest aircraft order signed in the history of Chinese civil aviation at that time. This diplomatic visit also reached another important cooperation agreement. Airbus and relevant Chinese parties signed an agreement to jointly build the A320 series aircraft assembly production line in Tianjin. This was Airbus’ first production line outside Europe at that time. It was not only a major achievement of China EU civil aviation industry cooperation, but also an important cooperation project to strengthen the strategic partnership between China and Europe. Chirac called it the “strategic marriage” between China and Europe, And he himself won the title of “super salesman” of Airbus.
Table 7: Airbus China orders signed by European countries through “aircraft diplomacy”
In the 20 years from 2001 to 2020, thanks to the huge political assistance provided by the further integration of Europe, Airbus continued to encroach on Boeing’s territory and completed the role transformation from challenger to leader, which was specifically reflected in the delivery volume, market share and order volume. In 2003, Airbus surpassed its competitor Boeing in the delivery volume for the first time, accounting for 52% of the global aircraft delivery volume that year. In 2019 and 2020, Airbus’ order volume and delivery volume exceeded that of Boeing for two consecutive years. Airbus has opened the distance from Boeing in many aspects and ushered in the peak.
In today’s era, the foundation of national strength lies in the economy, the foundation of economic strength lies in the industry, and the foundation of industrial strength lies in the enterprise. Those leading enterprises carrying the mission of strategic industrial development constitute the core pillar of national strength and the cornerstone for large countries to participate in international competition. Any aspiring big country will support the development of its strategic enterprises through domestic and diplomatic means. The civil aviation industry, especially the manufacturing of large commercial aircraft, is a truly strategic industry. Airbus and Boeing are crucial strategic enterprises in Europe and the United States respectively.
As a powerful geopolitical force, European integration has greatly enhanced the technical and market support capabilities of major European countries for Airbus. Therefore, Airbus overcame the incompleteness of the competition in the commercial aircraft market, and finally surpassed Boeing, which has the first mover advantage, and came from behind to become the leader in the manufacturing of large-scale commercial aircraft, and developed into an important benchmark for integrating European Industrial forces and building a European champion enterprise. European integration constitutes the most important political basis for the rise of Airbus. In this sense, Airbus is another important political product of the European integration process after the euro.