Airbus hits back over trade war threat

13 April 2012

THE prospect of Airbus imminently unveiling plans to develop a direct competitor to Boeing's new 7E7 Dreamliner aircraft is thought to be one of the main reasons behind America's decision to trigger a trade dispute with the European Union.

As revealed in the Evening Standard two weeks ago, Airbus has plans on the drawing board for the A350, an upgraded model based on its current 200-seat A330 model.

The new aircraft would have taken it head-to-head with Boeing's Dreamliner aircraft, a key plank in the strategy of Boeing chief executive Harry Stonecipher's plans to revive his firm's fortunes in the commercial airline market. Airbus last year overtook Boeing as the world's most popular provider of passenger jets, and the US firm has been dogged by management instability, strategy disagreements and accusations of corruption.

The rivalry between the two companies yesterday boiled over into a direct trade dispute with the US government filing a complaint with the World Trade Organisation about European State aid, and the EU filing a counter claim arguing against Boeing's government handouts.

'The path chosen by the US government today underscores our belief that the [Boeing] 7E7 programme is only viable because of the WTO-inconsistent subsidies granted to it - subsidies which were already prohibited by the 1992 Agreement,' Airbus said in a statement.

The European Union's trade commissioner, Pascal Lamy, said he regretted Washington's move and branded it 'obviously an attempt to divert attention from Boeing's self-inflicted decline'.

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