Source: WTO Finds EU Subsidies for
Airbus A380 Illegal

Source: Bloomberg

According to the Wall Street Journal BY JOHN W. MILLER, dated September 4th, 2009, he reported that The World Trade Organization ruled Friday that Europe's Airbus, a unit of European Aeronautic Defence & Space Co., had received illegal subsidies from European Union governments, according to a person familiar with the matter. In its interim decision on the case, the WTO said that every launch aid package given for the A380 passenger jet was an illegal subsidy.

---------------

It is already well known and reported by the media: include the menu printing in May 2005 that The shot that may launch history's largest trade war was fired quietly enough: In a menu card at the British Aeronautical Society's annual banquet Wednesday night, Airbus SAS announced it has applied for government support in launching its newest plane, the A350 which was threatening the new 787 Dreamliner--could break the uneasy cease-fire that has held between the U.S. and the European Union since face-to-face talks broke down in April 2005.

On June 13, 2005, the U.S. and E.U. blocked each other’s requests for the formation of a World Trade Organization (WTO) Panel to rule on the legality of E.U. subsidies to the Airbus A350/380 projects and U.S. subsidies to the Boeing 787 project.

See the Following Launch Aid By Plane from European Union: via 2006 media search

Launch Aid By Plane
Airbus
Subsidies By Subsidy Amount
Total
A300/A310 Germany $1.55 billion
  U.K None
  France $2.05 billion
  Spain $233 million
Total     $3.83 billion
A320 Germany $702 million
  U.K $567 million
  France $672 million
  Spain $87 million
Total     $2.03 billion
A330/A340 Germany $2.01 billion
  U.K $1.04 billion
  France $1.45 billion
  Spain $270 million
Total     $4.77 billion
A330-200 Germany None
  U.K None
  France $58 million
  Spain None
Total     $58 million
A340-500 / A340-600 Germany None
  U.K $215 million
  France $337 million
  Spain $75 million
Total     $627 million
A380 Germany $1.07 billion
  U.K $867 million
  France $1.37 billion
  Spain $426 million
Total     $3.73 billion

Note: Dollar amounts reflect payments in each country's own currency, indexed to 2003, and converted at rates applicable in the year of disbursement.

Overview of infrastructure subsidies for the Airbus A380.

GERMANY: $857 million

$850 million: Spent by the City of Hamburg to fill a part of the River Elbe to accommodate the expansion of a production facility.

More than $7 million: Provided as a grant by the Land of Lower Saxony for the expansion of its facilities in the City of Nordenham.

U.K.: $408 million

$376 million: Provided to fund the Broughton site.

$32 million: Given as a land grant from the National Assembly for Wales.

FRANCE: $298 million

$206 million: A public investment for an assembly site in Toulouse.

$82.6 million: Provided for road construction between Langon (port on the Garonne River) and a production site in Toulouse.

$9.7 million: Provided for construction in ports and along the Garonne River to accommodate transportation of A380 fuselages.

SPAIN: $143 million

$143 million: Investments made in Puerto de Santa Maria, Illescas, Puerto Real and La Rinconada plants." .

 

Via media search February 2005:

......a junior associate in Berlin turned up one big find: A report from the City of Hamburg about a landfill along the River Elbe. In the document, a law firm retained by Hamburg concluded that the $850 million public works project would qualify as a subsidy because it was built solely for Airbus' benefit.

....The transcript of a debate in Britain's House of Lords showed that Airbus received $797 million in loans on the A330 airplane through 1997 but had made no repayments in the decade since the first loan. This looked like proof that Airbus did not repay loans even on its most successful airplanes.

.....Sixty years after World War II, the Marshall Plan money is still around because Germany has charged interest on loans to successful companies. The searchers found Germany has loaned the money--officially called the European Recovery Plan--several times to benefit Airbus.

The following table will show the comparison between Boeing 787 Dreamliner and Airbus A350XWB concept:

The prototype Boeing 787-8 Dreamliner and Airbus A350 XWB concept
Company Name Boeing Airbus
Role Wide-body jet airliner Wide-body jet airliner
National origin United States, with international partners
Manufacturer Boeing Commercial Airplanes Airbus
Status In development/early production Under development

First Flight expected by the end of 2009

First delivery is expected to occur in the fourth quarter of 2010

First flight 2011 (scheduled)

Introduction 2013 (scheduled)

Unit cost

787-3: US$150.0–155.5 million

787-8: US$161.0–171.5 million

787-9: US$194.0–205.5 million

A350-800: $208.7 million

A350-900:$240.6 million

A350-1000: $269.6 million

Boeing have tried many different ways to work peaceful manner with the Airbus and try to communicate this matter although the Boeing had difficult times in which they were self-inflicted: It suffered from work stoppages, production shutdowns and indecision about launching new airplanes during 1991.

Boeing Company has been more hurt when Boeing did not win the KC-45A contract. The communities and the tax payers were relying on a big major company like the Boeing Company. The KC 767/777 tankers would made Amerian jobs more than nine thousands jobs and global partners and suppliers would actively work and expend the financial support around the world. Well, as soon as a big contract canceled for the Boeing Company, the Boeing had to let go (lay off) more than 10,000 people for Boeing Employees. Now the ripple action increased for the recession became the worst economic crisis and for the global economic crises got into worse. Many have thought that the Boeing would receive the fair treat on this case with taking care of the illegal subsidies by Airbus but, the worst case created for U.S and international suppliers and partners further more global economic crisis.......

It is already 21 century is near and this unharmonized global crisis has to stop: unfair subsidies will creat the global crises worse and worse. It is important that we make fair trade for the finance institutions and bank industries to create manageable environment for their businesses and support in order to recover the global crisis as fast as we can.

According to the Foxnews dated September 4th, 2009, Brazilian Foreign Minister Celso Amorim, who flew to New Delhi on an Embraer jet, said that "Of course we will be very interested because it may affect the way others operate," Embraer and its Canadian rival Bombardier were also embroiled in years of WTO litigation over aircraft subsidies. It is expected in six months, represent the biggest and most commercially significant dispute in WTO history.

Reported by catch4all.com, Sandra Englund, September 4th, 2009

Resources:

The Wall Street Journal

FoxNews

catch4all.com

"SKY Wars Europe Vs. America " via other media and catch4all.com dated Jan. 7, 2006

Canada Mondaq International Law dated 07 September 2005

(Blakes Bulletin on International Trade, July 2005 )

US Marshall Plan funds to Subsidize A350:dated Sat May 21 2005

Chicago News Tribune, May 2005

wikipedia

Airliners.net

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