01 July 2010

Airbus jet in jeopardy

The future of Airbus' next-generation passenger aircraft appears in jeopardy this week after the World Trade Organisation (WTO) effectively banned European governments, including the UK, from providing launch aid for the A350.

The WTO's ruling brings to an end the first round of a six-year legal battle between Airbus and its US rival Boeing, with both sides claiming the other had received illegal state aid.

While Boeing is arguing that Airbus should repay $4bn in government loans for its A380 'superjumbo', Airbus is waiting for the ruling on its claim that Boeing received prohibited loans from the US government for its 787 Dreamliner.

The WTO is expected to announce its preliminary ruling on the Boeing case next month.

Since the WTO stated that loans from the UK, France and Germany to Airbus for the A380 were illegal, the US is threatening possible trade sanctions if European governments provide similar aid for the launch of the A350.

Airbus says it will appeal against the ruling. The WTO also found that several other Airbus models benefited from subsidies.

By Linsey McNeill

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Your Comments (3)

Impractical maybe, but Hypocritical?

While the practicality of my proposal is open to debate, I don't think it's fair to call it hypocritical. I fully accept the US wanting to ensure that their planemakers can compete on the same playing field as European Planemakers, but I feel that such a goal should be sought through diplomatic channels, and not by threat of sanctions. I see the threat of sanctions as a challenge to the sovereignty of European countries. I feel that in proposing these sanctions the US is trying to bully the EU, and the only way to combat bullys is with strength. The EU needs to send a very clear message to the US that it was the strength to repel such bullying. I think the EU has become too dependent on the US anyway, and we would emerge stronger from this, but only if we tackle this problem head on.

By Rory Browne, Friday, July 2, 2010
Airbus subsidies

Rory's comment that the EU cannot allow itself to be bullied and respond to the US threat with sanctions is a tad hypocritical. For years countries trading with the EU have had to compete with massive state subsidies given to farmers,winegrowers, olive growers & yes, planemakers. Now we have further hurdles to confront in new regulations put in place for 'green' reasons. It's all getting too hard to trade with the EU, once my country's premier market and now slipped to 5th place & falling. To even suggest sanctions is a nonsense given the fragile state of European economies. With 84 pence in every pound of GDP being required to service the UK's debt I hardly think that PM Cameron would be putting his signature to an EU sanctions document!

By Gary Westwood, Friday, July 2, 2010
Bring it on

While I disagree in principle with using taxpayers money, the US should either be much more polite, or butt out. If they want to impose trade sanctions - bring it on. The European Union cannot allow itself to be bullied by the United States, and should in response to the mere threat, impose economic sanctions on the United States.

By Rory Browne, Thursday, July 1, 2010