Airbus subsidies to continue: French official

19th July 2010, Comments 1 comment

Germany, Spain, France and Britain will provide reimbursable subsidies to help Airbus develop its A350 aircraft despite the WTO's findings against past payments, a senior French official said on Monday.

French state secretary for transport Dominique Bussereau said that "despite the conclusions of the WTO (on subsidies), we confirm our commitment to Airbus."

Bussereau, speaking after meeting German, Spanish and British counterparts on the first day of the Farnborough International Airshow, said "the principle of reimbursable subsidies is not contrary to WTO rules, which means the French government will have a large programme of such payments."

France said it would make available up to 1.4 million euros in such subsidies to help Airbus develop the A350, a direct competitor for Boeing's 787 Dreamliner which made its international debut at the airshow.

Similarly, German will offer 1.12 billion euros, Britain about 400 million euros and Spain 332 million euros.

The A350, costing 11 billion euros to develop, is scheduled for delivery to airlines from 2013.

The World Trade Organization, in response to a Boeing complaint backed by Washington, recently found that state aid given over many years to Airbus was illegal.

Airbus, backed by the European Union has lodged a similar WTO complaint against Boeing, saying the US aerospace giant gets subsidies through orders for development and supply of military equipment for Washington.

The WTO's report on these alleged US subsidies to Boeing was supposed to come out on July 16 but it was delayed to September, prompting outrage in Brussels that Airbus was being made to look the guilty partner.

Last week, EU Trade Commissioner Karel De Gucht said the EU would likely appeal the WTO decision and accused the US authorities of using the WTO as a political weapon against the EU.

© 2010 AFP

1 Comment To This Article

  • Geoff Morris posted:

    on 21st July 2010, 15:37:50 - Reply

    While being biased since I work in Toulouse, I feel the whole tone of this article is completely misleading. For one thing, they are *not* subsidies, they are LOANS, for another the WTO did not rule them illegal outright, they ruled that the applied interest rates for repayment were too low. *This* is why the Europeans are happy to continue providing such LOANS - presumably adjusting the terms and conditions to comply with the points the WTO made in its report.