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Who’s Subsidizing That New Airbus Bus? Us!

The arrival of Airbus’ big-bus airplane in the U.S. last week was the occasion for lots of breathless coverage in the media.

The arrival of Airbus’ big-bus airplane in the U.S. last week was the occasion for lots of breathless coverage in the media. The A380, the largest passenger plane in history, did a kind of fashion-runway pirouette across the U.S., visiting JFK International, LAX, O’Hare, and Dulles outside Washington, DC.

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The Airbus A380 is an engineering marvel — it has 5,920 square feet of passenger deck space; outfitted for commercial flights, it will have 18 bathrooms and 16 doorways. The luxury version that came to the U.S. seated 519 passengers; configured for all coach class, the cabins could squeeze in 850 people.

The plane also cost Airbus $19 billion to develop, is two years late, and its production problems cost Airbus’ CEO his job. Airbus has orders for just 156 of the planes from 14 airlines — and no U.S. carrier has ordered the plane, which has a list price of $300 million. Airbus needs to sell 400 to break even on production costs.

But something barely discussed (and often omitted altogether) in the stories about the plane’s arrival here is what the A380 is costing U.S. flyers and taxpayers.

The big plane is costing us not just millions of dollars, but hundreds of millions.

We have a remarkably inconsistent attitude about government subsidies of business. When companies become unpopular, “taxpayer support” becomes a big target. One of the most effective strategies for attacking Wal-Mart has to been to detail the billions of dollars in routine subsidies that Wal-Mart receives, from local governments providing incentives to state health programs providing medical care to Wal-Mart families.

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Of course, we spend billions of taxpayer dollars building and maintaining roads every year — an expense to which GM, Ford, Chrysler, Honda and Toyota contribute nothing. Their products wouldn’t work very well without those roads, but we want the roads too, so we don’t even notice the “subsidy.”

Indeed, there’s nothing inherently wrong with us deciding to spend government money to make commerce possible. What’s important is to understand that Wal-Mart is hardly alone in receiving such help, to separate out attitudes about companies from attitudes about subsidies, and to have full transparency of the dollars involved.

Which brings us back to the Airbus A380. The plane is so large — each wing is as long as the Wright brothers’ first flight! — that U.S. airports have to be modified to accommodate it. The New York Times reported last week that JFK International has already spent $179 million widening and extending taxiways for the big plane, and may spend up to $300 million before regular service begins next year.

The Los Angeles Times reports that the city of Los Angeles has spent $49 million modifying the decrepit LAX international terminal for the A380, including $9 million for a single, double-deck boarding bridge. Before Quantas begins flying the new Airbus from LAX to Sydney next year, the airport will have spent $121 million on modifications.

Airbus’ North American chief Allan McArtor told the crowd greeting the plane in Los Angeles that the plane is “perfectly designed for Los Angeles and LAX.” Indeed. Once LA finishes spending $12 for every man, woman and child in Los Angeles County.

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About the author

Charles Fishman, a long-time Fast Company staffer and contributor, is the author of "The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy," the definitive look at Walmart, as well as "The Big Thirst, The Secret Life and Turbulent Future of Water."

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