Boeing could not have launched 787 without Govt support: WTO

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A World Trade Organisation (WTO) finding that Boeing couldn't have launched the 787 without government, NASA and US Department of Defence subsidies has been hailed by Airbus as a victory in its long-running dispute with its American arch-rival over allegedly illegal state support.

The WTO, ruling on a European Union case against the USA - filed in response to a 2004 US complaint about state aid to Airbus to develop the A380 and other models - detailed "at least" $5.3 billion worth of illegal subsidies to Boeing in the 1989-2006 period.

Amounts ranged from $11 million in grants and tax breaks from the state of Illinois, partly to pay for Boeing's corporate headquarters move from Seattle to Chicago, to $2.6 billion from NASA aeronautics research programmes.

According to the WTO, the large airliner market demanded Boeing replace its 767, but without state support the company could not have launched an aircraft as advanced as the 787 for delivery in 2008 as promised on launch four years earlier. And, says the WTO, the resulting quality of the 787 did serious damage to sales of the Airbus A330 and the original A350.

The public release of the ruling follows the WTO's similar move in October 2010 on the US case against Europe, which found that Airbus could not have brought to market airliners of the quality that it has without state aid.

In both cases, the WTO found that state aid to the rival airframer had the result of undermining export sales of Airbus and Boeing aircraft.

Airbus contends that subsidies to Boeing have caused it $45 billion in economic damage.

"Finally the truth emerges: Boeing has received and continues to receive subsidies which have a significantly greater distortive effect than the reimbursable loans [from European governments] to Airbus," says Airbus.

"It's time for Boeing to stop denying or minimising the massive illegal subsidies it gets."

Boeing dismisses the $5.3 billion figure, putting the total at less than $2.7 billion, while contending that Airbus has received more than $20 billion in illegal assistance.

"This WTO ruling shatters the convenient myth that European governments must illegally subsidise Airbus to counter US government assistance to Boeing," says Boeing general counsel Michael Luttig.

Both sides are expected to appeal the latest ruling.