Obama intervention costed us billions of dollars: Airbus executive

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John Leahy, chief operating officer of Airbus. Photo - Jerome Favre/Bloomberg

Gone are the days when criticism of US interventionist policies was exclusive to rogue states like Iran, Syria and North Korea or terrorist organisations like Al Qaeda. Europe’s Airbus has accused the White House of sabotaging an open competition by coercing Boeing clinch a massive aircraft agreement in Indonesia after details of a shadowy deal worth $22 billion emerged.

Airbus’ chief sales officer said lobbying from the office of US President Barack Obama is tantamount to an attack on free-market competition and exposes Washington’s double standards.

“There’s only one superpower in the world and I think we know it is not France; it is probably represented by President Obama,” John Leahy said while he took a swipe at US government.

“When he starts making headlines that he is selling airplanes and how that wouldn’t happen without his personal involvement, we are seeing economic distortion and we shouldn’t be talking about free and open level playing fields for trade around the world if the US pulls stuff like that,” the Airbus official added.

US President Barack Obama unveiled an order of 230 jets placed by Lion Air, an Indonesian budget carrier, worth $21.7 billion, considered the largest commercial deal in the history of US planemaker.

Both Airbus and Boeing are locked in trade battles with attempts to topple each other in aviation world. Several months ago, American Airlines, an exclusive Boeing customer, placed an unprecedented order of 260 aircraft with Airbus and took the industry by surprise.

The move sent shockwaves across the Seattle-based airframe maker and forced it to revive its 737 model with new engines in a bid to challenge Airbus’ growing dominance.

Obama hailed the deal as a “win-win” situation for US workers and Asian consumers and promised his administration will continue to support American jobs. Sources said Export-Import Bank and Obama administration figures played a key role in facilitating the Indonesian airline deal.

Despite the fact that Lion Air had an all-Boeing fleet, Leahy insisted Airbus might have won the deal had it not been coerced by Obama administration.

NAKED INTERVENTION

“The CEO and owner of that airline, who has bought nothing but Boeing airplanes, actually came to see me in Toulouse twice to talk about buying the airplanes and in the end told me he had no choice,” Leahy revealed.

“I am not sure what ‘has no choice’ means, but there seems to have been an awful lot of political interference and I think the White House is very proud of that, taking credit for it, saying it would not have happened without White House intervention. Well, that is probably true, but it doesn’t really speak well for freedom of competition and free trade.”

Both White House and Boeing spokespersons refused to comment on Leahy’s remarks.

Inside sources say Airbus is furious as it had already signed a memorandum of understanding with Lion Air, a document which signals almost competition of a deal.

Lion Air has refused to comment on Airbus’ revelations but denied bowing to pressure.

“I do not wish to comment on that issue, but all I can say is we did the purchase purely on a commercial basis and we have our independence in doing so,” Lion Air spokesman Edward Sirait said.

BLOOD THIRSTY COMPETITION

Diplomatic pressures and government intervention have become part and parcel of aerospace industry deals as aircraft manufacturers chase airlines and other businesses for deals worth billions of dollars, ensuring survival and shoring up growth.

Wikileaks has published hundreds of confidential cables which showed how American governments and their European counterparts resorted to high-level salesmanship and coercion. Top US officials, including President Barack Obama, have made commercial sales pitch when travelling overseas as part of the US National Export Initiative, the cables revealed.

European leaders have also come under spotlight for enticing leaders of developing countries buy European Aeronautic Defence and Space (EADS), a pan-European corporation, aircraft and defence equipment.

Trade battles between Airbus and Boeing have heated up during the last few years as both planemakers compete for aircraft sales worth around 80$ billion annually as airlines from emerging nations scramble for spare parts and revamp their existing planes.

Both EU and US are locked in world’s largest trade dispute over government subsidies to Airbus and Boeing respectively. EU announced Thursday it has met a deadline to comply with a World Trade Organisation ruling against European government subsidies for the EADS subsidiary.

(By Moign Khawaja with input from Reuters)

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