Boeing fights on against Airbus superjumbo aid

Date: 05/04/01

By Peter Chapman

US aeroplane giant Boeing's plans to re-focus on faster long-range aircraft does not signal an end to complaints over European subsidies to Airbus' new superjumbo, Washington officials and company executives said this week.

Boeing announced it will no longer compete head on with the 555-seat A380 Airbus, effectively surrendering a market that the European venture predicts will be worth billions a year.

Instead it said it will concentrate on a new breed of super-fast mid-range jet that can trim 90 minutes off a transatlantic trip and three hours off a transpacific flight.

But the turnaround does not mean an end to US complaints about government funding worth €2.6 billion from the UK, Germany and France to kick-start the €12.1 billion A380 project - and provide a feather bed to fall on if it flops.

Washington sources said the US will stick to an earlier demand for data by next month proving that the payments breached neither a 1992 agreement between the EU and US nor WTO rules governing the sector. These do not rule out government aid, but stipulate that loans should be made at commercial rates.

Boeing's director of European Public affairs Jean-Marc Fron said its focus on the fast 300-seater and ongoing complaints were not linked. He added: "The fact that this new aeroplane is now top of our strategy does not stop our concerns."

"We believe that the A380 launch must be driven on a purely commercial basis, with no financial incentives or special government help. We also believe that any loans should be repaid at market rates."

Trade Commissioner Pascal Lamy's spokesman Anthony Gooch said governments supporting the Airbus superjumbo were "finalising details of their relative financial assistance packages".

"We must ensure that any financing is compatible with the 1992 agreement," he said, adding that officials would help "pull together all the strands to make sure that it is".

Analysts were this week split over the commercial sense of Boeing's bold move to back out of the big-jet market it has dominated since the launch of the wide-bodied 747 in 1969.

The question now is whether passengers will prefer to fly in greater comfort between big hub aiports such as Chicago and London Heathrow in the Airbus or opt for faster trips direct to business centres on the smaller Boeing jet.

UA aeroplane giant Boeing's plans to re-focus on faster long-range aircraft does not signal an end to complaints over European subsidies to Airbus' new superjumbo, according to Washington officials and company executives.