Airbus Defends A350 Financing

LE BOURGET, France (AP) -- Airbus CEO Tom Enders defended government financing for the euro11 billion ($15.24 billion) A350 XWB program on Tuesday, claiming the European planemaker is seeking a "level playing field" with competitor Boeing Co.

Boeing called the European government funding for the project unfair.

A funding row over the A350 XWB, designed to compete with Boeing's hot-selling 787, could re-ignite an old trade dispute over alleged large commercial aircraft subsidies awaiting a ruling by the World Trade Organization. The U.S. and EU both accuse each other of providing billions in illegal subsidies to the companies.

In a news conference at the Paris Air Show, Enders confirmed the development costs of the program would be "around euro11 billion," of which 30 percent to 33 percent could be financed by reimbursable loans from European governments.

He said Airbus needs the financing to "level the playing field with our competitor."

The United States says EU subsidies have enabled Airbus to capture long-standing Boeing customers. The EU counters that Boeing receives U.S. federal and state tax breaks, development funding and grants, as well as a large amount of military contracts.

The four European countries that produce Airbus jets failed to agree financing at a meeting on Monday because the fourth nation -- Spain -- did not show up.

Enders tried to squash suggestions that this was due to a problem with Spain, saying: "From Airbus' point of view I do not see any conflict with the Spanish government."

French Transport Minister Dominique Bussereau said a decision should be reached within a month.

"What makes this disappointing is that the Airbus countries, the Airbus trade ministers, are very much aware that the WTO is about to make this ruling. It really does seem to show some disregard for the process," said Theodore Austell, Boeing's vice president for government operations.

"Airbus, EADS as an enterprise has indicated on more than one occasion that they have sufficient funds within their own coffers to fund future programs," he said, calling Airbus plans to seek government financing "pretty remarkable."

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