Business

Boeing warns Airbus over reports of state aid

Airbus A 380
Image caption The A380 passenger plane has almost 320 firm sales, but orders have been flagging recently

Boeing has warned arch rival Airbus over unconfirmed reports that it wants state aid for a new version of its A380 super-jumbo jet.

Ray Conner, head of Boeing Commercial Airplanes, said subsidies or loans for a new airliner would breach World Trade Organisation (WTO) rules.

Airbus said it would not comment as it had not yet decided on a revamped A380.

The two aerospace giants were locked in years of litigation over accusations that each received state funding.

But recent sales of the world's largest passenger aircraft have been disappointing, while Reuters and the UK's Sunday Times newspaper have reported that Airbus has sounded out European governments about loans for an upgrade.

The so-called A380neo could have new engines and more seats. The current A380, built at a cost of at least €15bn (£11.4bn), is certified to carry 853 passengers, but typically carries about 550.

A decade after its launch, the A380 has almost 320 firm orders and there was speculation earlier this year that the whole programme could be scrapped.

Boeing tax breaks

Mr Conner said at the Paris Air Show that an application for state loans risked reopening the dispute with Airbus.

"Whether they go forward with that, we will address as it comes along. That would clearly not be in line with what the WTO has said," Mr Conner said.

Both companies have claimed partial victories in their long-running dispute, but are now fighting over whether their rival is complying with the WTO.

Airbus accuses Boeing of benefiting from billions of dollars in tax breaks in Washington state. Mr Conner defended the benefits, saying that the incentives were open to the whole aerospace industry.

"There are about 2,500 aerospace companies in the state of Washington that benefit. Frankly, if Airbus or Bombardier, or any of our competitors, want to come to Washington state, they would get the benefit as well," he said.

An Airbus spokesman said he would not comment as "there is no A380neo programme".

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