Boeing Claims 'Sweeping Legal Victory' in WTO Airbus Ruling

Boeing says ruling will require Airbus to repay four billion dollars

A WTO ruling on June 30 concluded that some European state subsidies to aircraft giant Airbus are illegal. Boeing said the ruling would require Airbus to repay four billion dollars under the illegal subsidies, a claim disputed by the European aerospace giant.

"This is a landmark decision and sweeping legal victory over the launch aid subsidies that fueled the rise of Airbus," said Boeing CEO Jim McNerney.

The six-year complaint claimed that unfair subsidies from the EU to Airbus worth up to $200 billion helped the European maker seize more than half of the market for civil airlines.

Under the panel's ruling, Airbus "must repay the four billion dollars in illegal launch aid it received for the A380 or restructure the A380's financing to proven commercial terms," said Boeing general counsel J. Michael Luttig.

"Likewise, Airbus must abandon its plans to finance the A350 through the use of illegal subsidies," he said.

McNerney said the Office of the U.S.Trade Representative deserves "tremendous credit" for the decision. "We now join the U.S. government in urging full compliance with the ruling and a permanent restoration of fair competition within our industry," he said.

U.S. Trade Representative Ron Kirk earlier claimed an "important victory" in the ruling, which he said "will benefit American aerospace workers, who have had to endure watching Airbus receive these massive subsidies for more than 40 years."

An industry source has warned the European Union would appeal the ruling.

Seventy percent of the U.S. claims "were rejected and wild allegations have been proven wrong," Airbus said. "Neither jobs nor any profits were lost as a result of reimbursable loans to Airbus," said the European aircraft giant.

Copyright Agence France-Presse, 2010

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