We don't need help for the A350: Airbus CEO

6th October 2005, Comments 0 comments

PARIS, Oct 7 (AFP) - European aircraft manufacturer Airbus said on Friday that it could finance the costs of developing its A350 mid-sized airliner without loans from European governments.

PARIS, Oct 7 (AFP) - European aircraft manufacturer Airbus said on Friday that it could finance the costs of developing its A350 mid-sized airliner without loans from European governments.

Commenting on the estimated EUR 4.35bn-cost of the project, chief executive of Airbus, Gustav Humbert, said: "We are able to finance the A350 from our own funds".

Airbus shareholders backed the launch Thursday of the A350, a mid-size, long-haul aircraft to compete with Boeing's planned 787 Dreamliner, and agreed to temporarily forgo government aid to finance development costs.

The European Aeronautic Defence and Space Company (EADS), which owns 80 percent of Airbus, said the decision to do without state assistance next year was aimed at facilitating a negotiated settlement to a US-European Union subsidy dispute now before the World Trade Organization.

But a US trade official quickly dismissed the initiative and insisted that any state launch-aid made available to Airbus was "unacceptable".

The move to begin production of the A350 was also backed by BAE Systems of Britain, holders of a 20 percent stake in Airbus.

Announcing approval of the A350 program, EADS said Airbus would not take immediate advantage of reimbursable government loans from Britain, France, Spain and Germany.

The EU and the United States are at loggerheads over state subsidies and assistance given to their respective civil aircraft manufacturers, with each accusing the other of breaching international competition rules.

"Airbus, EADS and BAE Systems have decided that no disbursement (of loans) should take place throughout 2006 as long as there is a credible prospect of negotiations and similar restraint is being undertaken in the United States," EADS said in a statement.

The company said it had received "letters of general support" from governments after requesting loans to finance part of the project.

It added that the decision to do without the aid for the moment "confirms the willingness of EADS, BAE Systems and Airbus to settle the trade dispute through negotiations."

The EU's executive commssion in Brussels took "note that no ... launch investment has been put in place for the A350," which according to commission spokesman for trade Peter Power "helps a possible negotiation in the dispute with Boeing, which we would welcome."

But the initiative drew a decidedly cool reaction in Washington.

"The United States has been clear in its message: launch aid for the A350 or any other Airbus aircraft is completely unacceptable," said Christian Baker, an official with the office of the US Trade Representative.

"It's clear that the EU countries are unwilling to stop subsidizing Airbus. Therefore, we will continue to push ahead with our WTO case.

"We take no comfort from any offer to postpone the actual payment of the launch aid these countries have already promised to provide. The announcement of their commitment to back the A350 will affect Airbus's financing costs regardless of when they formally write the check," said Baker.

EADS said Airbus had already received 140 orders for the A350 from nine different airlines. The company hopes to have 200 commitments by the end of the year for the plane, which will be available in two models with between 253-300 seats.

In the market for mid-sized, more fuel-efficient airlines, Boeing has already stolen a lead over its rival -- the US manufacturer has received 263 orders for the B787 Dreamliner that is scheduled to enter service in 2008.

The A350, which can accommodate between 253 and 300 passengers depending on the model chosen, will begin commercial flights in 2010 after Airbus's A380 superjumbo enters service, the soon-to-be biggest commercial plane in the world that is capable of carrying up to 840 passengers on longhaul trips.

Copyright AFP

Subject: French news

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