European governments have agreed to withhold funding commitments for a new Airbus plane set to be launched on Thursday while negotiations continue to resolve their aircraft subsidies dispute with the United States.
As Airbus parent European Aeronautic Defence and Space (EADS) company prepared for a board meeting at which it was expected to give the green light for the A350 jet, officials said Wednesday that no government funding promises would be announced with the launch.
”The deployment of possible aid will not be immediate,” French Minister of Transport Dominique Perben said in an interview with financial daily La Tribune in the paper’s Thursday edition.
France has agreed ”in principle” to provide funding, Perben said, but the dossier is still ”in the process of being examined”.
A European Union official said on Wednesday that France, Germany, Britain and Spain are holding back from granting launch aid to the mid-sized A350 while the EU and Washington seek an amicable settlement to their trade dispute. The official spoke on condition of anonymity because discussions were still ongoing.
Washington filed a World Trade Organisation complaint last year against European government subsidies to Toulouse, France-based Airbus. The EU countersued, citing subsidies to Chicago-based Boeing.
Europe’s conciliatory move follows warnings from US Trade Representative Rob Portman that any government aid pledged to the A350 — designed to rival Boeing’s long-range, fuel-efficient 787 — would jeopardise attempts to broker a compromise.
”Although we remain open to a negotiated solution to this issue, our negotiations will become much harder if the United Kingdom, or any other EU member state, commits subsidies for the A350,” said Portman’s spokesperson, Christin Baker, in a statement e-mailed to The Associated Press.
But a spokesperson for Portman’s EU counterpart, Trade Commissioner Peter Mandelson, dismissed suggestions that the move would be seen as a European climb-down.
”It’s an example of Europe’s continuing wish to be constructive,” Peter Power said. ”The European Commission continues to believe that there is a prospect of a negotiated solution to the dispute over civil aircraft subsidies.”
EADS refused to comment on Thursday’s board meeting or the expected launch of the A350 — when Airbus gets the go-ahead to begin taking firm orders for the plane, slated to enter service in 2010.
But spokesperson Rainer Ohler said the company’s two joint-chief executives had ”made it very clear that EADS is going to be very flexible” on government launch aid.
”We would never create a situation in which a negotiated solution would be excluded,” Ohler said.
Airbus spokesperson Barbara Kracht also played down the significance of a decision to launch the A350 without firm government funding pledges.
”We have launched planes in the past where things were not finalised at the time of launch,” Kracht said. She declined to say when Airbus now expects a final decision on launch aid.
Airbus has applied for about â,¬1,5-billion in funding from its supporting governments toward the estimated â,¬4,4-billion programme cost.
The transatlantic trade row erupted after Washington announced it was cancelling a 1992 bilateral agreement that set limits to aircraft subsidies in Europe and the US.
The pact limited direct launch aid of the kind received by Airbus — repayable with interest and royalties, but only if the plane is a commercial success — to 33% of development costs.
Indirect, non-repayable support, such as Boeing’s R&D funding from Nasa and the Defence Department, was capped at 3% of annual revenue. — Sapa-AP