On the political determinants of wide-body aircraft sales, 1974–89

ABSTRACT

This article contributes to the ongoing discussion on unfair government support for the world’s major civil aircraft producers, Airbus and Boeing. In a logit setting, we identify political (and economic) determinants of airlines’ decision to buy either Airbus or American brand-new wide-bodies in the market’s formative period. We find evidence for political determinants at work not only for Airbus, but – to an even greater extent – also for the American manufacturers, such as home bias.

KEYWORDS:

• Airbus
• economic history
• boeing
• civil aviation
• government support

JEL CLASSIFICATION:

• L93
• N60
• R48

Data availability statement

The underlying dataset is available upon request from the authors.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Recall the Japanese government’s interest in reducing the massive trade surplus with the US in the 1970s and 1980s by, supposedly, incentivizing Japan Airlines and All Nippon Airways to massively buy American aircraft (Sandholtz and Love 2001, 153–154).

² We continue to speak of ‘airlines’ although the term ‘operator’ might be more accurate due to a number of governmental customers in the dataset.

³ Historically, former colonial rulers may well have been extending diplomatic and financial control over former colonies far beyond the formal end of colonial rule (Jopp and Spoerer 2021). It therefore suggests itself to control for such relations.

⁴ The fact that the respective variables turn out statistically significant in models 2a and b, but not in 1a and b may be due, technically, to the differing relative sizes of the groups compared.

⁵ Lockheed’s and McDonnell Douglas’s combined share in the US market over 1974–89 was larger than Boeing’s.