Air giant row
March 23, 2010
US aerospace giant Boeing has condemned a German plan to make 1.1 billion euros ($1.5 billion) available to its arch-rival Airbus.
The aircraft maker also criticized the timing of the announcement, a day ahead of an expected World Trade Organization (WTO) ruling on state aid for aircraft makers.
German government aerospace coordinator Peter Hintze confirmed plans on Monday to make development funds available for the medium-sized A350 passenger jet. The aircraft is seen as a possible future market rival for the Boeing 787 Dreamliner.
The US government along with Boeing claims that loan payments by European governments to Airbus aircraft are, in reality, unfair subsidies. Boeing believes that the WTO is set to rule in its favor.
"On the eve of such an important decision, it is unfortunate and disappointing to see news reports quoting a senior German official saying that Germany is prepared to provide 1.1 billion euros for the development of the Airbus A350," said Ted Austell, vice president of Boeing's executive, legislative and regulatory affairs.
Move defies the rules
Austell said the deal was "a move that flies in the face of both the expected WTO decision and the rules-based global trading system we've all endorsed."
However, in a newspaper interview, the German aerospace co-ordinator said that the latest round of funding broke no rules.
"On our side all the pre-conditions are fulfilled. The conditions of the loan are in conformity with WTO rules and the funds are available," Hintze told German daily newspaper Die Welt.
The US complaint to the WTO is that Airbus received 150 billion euros in loans and other benefits on unfair terms from Britain, France, Germany and Spain, over two decades.
Although the WTO ruling is not directly related to the A350 loan, it could affect the speed at which the money must be paid back. The European Commission has brought a counter-claim over financial aid to Boeing against Washington.
The two cases, combined, amount to the biggest dispute ever to be handled by the WTO. Although governments expect to receive the final WTO report on Tuesday afternoon, the public release will not be until April.
rc/AP/Reuters/AFP
Editor: Andreas Illmer