US government's aid to Boeing hurting Airbus, European Union complains to WTO
Our Corporate Bureau
27 September 2007
The European Union (EU) has claimed that US subsidies for American aircraft maker Boeing have cost Europe's Airbus $27 billion in losses. EU officials made the claim at the start of a World Trade Organisation (WTO) hearing into its complaint that the US aid broke free trade rules.
The US has a parallel complaint in the WTO against EU subsidies for Airbus. Washington counters that Airbus has used billions of euros of European subsidies to boost its market share.
The US government and the EU, rather than the companies, have made cross-complaints to the WTO on parallel grounds, as the WTO deals with inter-governmental disputes, not those between companies.
Boeing is relying on a smoke screen of inflated numbers and broad-brush accusations, an Airbus representative said. The EU's $27 billion figure represents the losses it says the US aid for Boeing has caused Airbus in the past three years alone. Washington counters that Airbus has wrongly taken subsidies of up to $205 billion since its inception.
The WTO is due to rule on the US complaint in December 2007. The decision on the EU's complaint is due in June 2008. Boeing and Airbus dominate the market for medium to large-sized commercial passenger aircraft, which is worth an estimated $80 billion a year.
Airbus and Boeing's global sales are now roughly equal, after Airbus's market share fell from 54 per cent last year, owing to the highly-publicised difficulties surrounding its new A380 superjumbo and the unprecedented success of the Boeing 787 Dreamliner.
Boeing has also seen delays in the schedules of its 787 Dreamliner, but says it will deliver the new-generation aircraft on time. The A380 is due to enter commercial service next month with Singapore Airlines.