A UK government loan in support of Airbus's A350 XWB programme has sparked a fresh row between Boeing and its European rival ahead of an interim ruling by the World Trade Organisation on their long-running trade dispute.
On 14 August, UK business secretary Peter Mandelson revealed that Airbus's newest commercial type would be allocated £340 million ($563 million) in UK government assistance to support manufacture of the wing and other components, to be undertaken at Filton and Broughton. "The launch investment of £340 million is repayable, not a grant, and earns a real rate of return," says a government statement.
Boeing labels the loan award as "disappointing", noting that it came on "the very eve" of a draft WTO ruling on the US case against Europe on launch aid and other subsidies to Airbus. The US airframer expects this ruling by the end of August.
The case was originally filed in 2004 and provoked a counterclaim by the European Commission concerning research and development assistance to Boeing. Europe's complaint will be ruled upon separately.
In its statement on the A350 loan, Boeing asserts that its European rival "has relied on risk-free government launch aid to develop each of their commercial aircraft", adding claims that launch aid "violates the WTO subsidies agreement" and is "a market-distorting subsidy that is unique to Airbus".
Since its corporate owner EADS has a cash position of €8.1 billion, Airbus has "no need of financial support from the taxpayer", argues Boeing.
Airbus is dismissive of Boeing's objections. It claims that the US government has allocated more than $5 billion in non-repayable grants to the 787 programme. "When the competition has a $5 billion funding advantage (at least), how do you expect the European governments to react? Ignore it? Or level the playing field?" asks Rainer Ohler, senior vice-president of public affairs and communications at Airbus. "Why should loans be market-distorting when the competition was given grants?"
Negotiations are required to settle the dispute, Ohler argues. "Maybe after the two draft interim reports or after two rulings the parties will eventually come to the table and jointly face reality: aviation is a strategic industry in which governments will always take a special interest and engage to support technology development and high-tech jobs."
Airbus expects the WTO to issue an interim report on Europe's complaint "around six months" after the imminent ruling on the US-filed case.
Source: Flight International
