Airbus: ‘launch aid no great bargain’

Thenever-ending and why-did-it-ever-get-started transatlantic World TradeOrganisation legal battle between Airbus and Boeing over government subsidiesis certainly among the best lawyers’ pension schemes yet devised in the 21stCentury, and well-enough detailed here on as to demand nofurther illumination (until such time as something really happens, which couldbe a very long time if ever).

Remarkably,though, the saga took another spin deeper into Jarndyce v Jarndyce territoryyesterday when Hans Peter Ring, chief financial officer of Airbus parent EADS,fielded a question about so-called “launch aid” loans to Airbus by Europeangovernments. These loans, which Boeing alleges undermines its own competitiveposition by pumping cheap money into Airbus’s development of new airliners, arerepayable and, according to a WTO ruling in the case, quite legal.

According to Ring, they are also more expensive than Airbus could borrow in thenormal commercial lending market. Airbus takes them, though, because theyspread the risk better, he added. We shouldn’t discount the value of spreadingrisk better, but if Ring is right then it’s really difficult to see just whatit is Boeing is making such a fuss about.

So, howlong can it be before the United States, Boeing, the European Union, Airbus andtheir ranks of lawyers reach the point, like their fictional counterpartscontesting Jarndyce v Jarndyce, that they genuinely cannot recall what it isthey are fighting about bar the latest procedural matter in the case?

Still,it is not just trade laywers who should thank Airbus and Boeing. Any aerospaceindustry observers who have not had the pleasure of reading, or re-reading, Bleak House should take this case asexcuse to revel in a classic which reminds us all how trivial such things aslegal battles between rich people really are.

But asinsightful as Charles Dickens was, don’t take Bleak House as a guide to how Airbus v Boeing might turn out. Jarndycev Jarndyce came to a sudden and unexpected conclusion, with no apparent winnerbut sparking off great celebration all around. Airbus v Boeing is unlikely toend, let alone warrant celebration. If there is any winner, it will surely be someoutside party like China or Brazil.

Leave a Reply