The US has terminated a 1992 civil aircraft agreement covering government support for the two top aircraft manufacturers boeing and Airbus and filed a case challenging EU loans to help Airbus develop aircraft. On the same day, Wednesday 6 October, Europeans reacted by filing a countercomplaint relating to US support for Boeing.
"Since its creation thirty-five years ago, some Europeans have justified subsidies to Airbus as necessary to support an 'infant' industry. If that rationalisation were ever valid, its time has long passed," U.S. Trade Representative Robert Zoellick said in a statement. Airbus, which began as a consortium of French, German, Spanish and British companies, is now co-owned by European aerospace company EADS and Britain's BAE Systems. Its current sales figures are slightly ahead of Boeing's.
According to Trade Commissioner Pascal Lamy, the US complaint is "obviously an attempt to divert attention from Boeing's self-inflicted decline. If this is the path the US has chosen, we accept the challenge, not least because it is high time to put an end to massive illegal US subsidies to Boeing which damage Airbus, in particular those for Boeing's new 7E7 program".
Launch aid for large aircraft in the US and Europe is governed by a 1992 agreement that limits the support for any project to a third of the development cost. Boeing is working on a medium-sized jet liner, the 7E7, where development is expected to cost about 8 billion euro, while Airbus is producing a super jumbo, the A380 at a launch cost of around 12 bilion euro.
Under WTO rules, the two sides now have 60 days to try to reach an agreement before an independent panel is set up to examine the dispute. Both sides believe that the outcome of the dispute will go a long way to determine which of the two giant plane-manufacturers will dominate the market in years to come.
