Aviation industry awaits WTO's verdict on public finance for Airbus

Published on Friday 4 September 2009 21:50

THE aviation industry is on high alert for the outcome of a World Trade Organisation inquiry into whether European government aid to Airbus allowed the company to surpass Boeing unfairly as the leading producer of commercial planes.

The WTO yesterday handed both the United States and the European Union a 1,000-page report with more details on the outcome expected over the coming days.

The US and Europe have long been at loggerheads over billions of dollars of European government financing, which helped Airbus to develop new planes. The Americans lodged a complaint that the subsidies were unfair and harmed US interests.

The WTO's ruling is expected to set important precedents on how far governments are able to go to support their own aviation industries.

Both Washington and Brussels yesterday confirmed they had received the report, but would not provide further details.

Deborah Mesloh, deputy assistant US trade representative in Washington, said: "In this dispute, the United States is challenging dozens of measures providing billions of dollars in subsidies to Airbus, including launch aid to every major Airbus aircraft model."

She added: "The dispute has proven to be one of the most complex and lengthy disputes under the WTO."

Arch rivals Boeing and Airbus are locked in two separate disputes as they both vie for a bigger share of the global aviation market, which is expected to grow to $3.2 trillion over the next 20 years. In the other case, Europe alleges that Boeing benefited from government subsidies from the US defence department and Nasa.

Lutz Guellner, spokesman for the European trade commissioner, said yesterday: "This report is only half of the story, and we await the interim report in the case launched by the EU against the US, which we expect to be issued in a few months."