Airbus, Boeing trade blows after WTO edict

By Sui-Lee Wee and Alison Leung

HONG KONG (Reuters) - Airbus on Tuesday rejected U.S. calls to renounce government loans for its next airliner after the WTO gave a preliminary ruling against earlier loans, while a Boeing executive hit out at unfair "subsidies".

In an unpublished draft ruling on Friday, the World Trade Organisation said government loans used to develop planes such as the A380 superjumbo were "actionable" subsidies harming rival Boeing, according to sources familiar with the case.

It also ruled that some of the loans, including part of the funds lent by governments to help build the A380, violated an even tougher ban on export aid, the sources said.

The findings, which came in a confidential 1,000-plus page ruling, are the latest chapter in a decades-old battle between Boeing and Airbus for dominance of the global aircraft market, a major source of jobs on both sides of the Atlantic.

The outcome of the case and a European Union counter-claim against alleged U.S. support for Boeing could determine the options for funding Airbus's next airliner model, the A350.

Washington reacted angrily when Britain, which builds wings for Airbus aircraft, said last month it would provide $565 million in further loans to help develop the mid-sized jet. France, Germany and Spain are expected to follow suit.

Airbus has "absolutely no plans to change the funding for the A350 at the moment," Christopher Buckley, executive vice-president for Europe and Asia Pacific, said on Tuesday.

"From the Airbus point of view, we strongly believe, as we've always done, that reimbursable launch aid is a very good way of launching aircraft programmes," Buckley told Reuters in an interview at the Asian Aerospace exhibition in Hong Kong.  Continued...