Thursday, November 26, 1998 Published at 11:07 GMT
Business: The Company File
Boeing and Airbus 'under investigation'
While Boeing planes fly high, company profits take a dive
The US Federal Trade Commission (FTC) is reported to be looking into price fixing allegations made against the world's two largest commercial plane manufacturers, Boeing and Airbus.
Airbus denied colluding with Boeing over price rises.
A spokesman said "even to hint that would be insulting".
Both companies told the Financial Times in separate interviews earlier this year that they would no longer compete purely on price.
The investigation seems to focus on the list prices for planes, although airlines rarely pay the full list price.
They either negotiate discounts when buying a large number of aircraft, or lease planes from companies that own large fleets and specialise in leasing them.
Airbus, which started from scratch in the 1970s, now has a share of about 50% of the market.
The European company recently scored a major success when it persuaded British Airways to buy 180 Airbus planes.
Until now BA's fleet of large planes consisted almost exclusively of Boeing aircraft.
Industry experts say the bitter price war to win customers has cut margins for both manufacturers.
Boeing's $178m net loss in 1997 - its first in 50 years - was blamed on the tough competition for market share.
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