Associated Press
Airbus CEO Accuses Boeing of 'Untruths'
Tuesday September 28, 4:55 pm ET
By Laurence Frost, AP Business Writer
Noel Forgeard, Head of Airbus, Accuses Rival Boeing of Leading 'Campaign of Untruths'
PARIS (AP) -- The head of Airbus SAS accused rival Boeing Co. of leading a "campaign of untruths" against the European aircraft maker, and gave the clearest sign yet that Airbus plans to develop a new competitor to the Boeing 7E7.
Airbus CEO Noel Forgeard made the comments in an interview published Tuesday by the financial daily Les Echos, at a time of mounting tension between the United States and the European Union over public subsidies to Airbus and Boeing.
Boeing CEO Harry Stonecipher has urged European governments to stop granting loans that account for roughly one-third of Airbus' development spending -- the limit set in a 1992 pact between Brussels and Washington.
The U.S. government has also threatened to scrap the pact and challenge Airbus funding at the World Trade Organization.
But Forgeard said that about two-thirds of the Boeing 7E7's $9 billion development cost came from public aid, most of which was not repayable -- unlike loans to Airbus.
"This offensive is therefore a massive campaign of untruths, whose principal aim is to protect the 7E7's enormous subsidies," Forgeard said.
Boeing has staked its future in civil aviation on the 7E7, a long-range, fuel-efficient mid-sized jet due to be launched in 2008.
A decision to launch a WTO panel could backfire against Boeing, Forgeard warned. "I think they would be the most embarrassed if they were forced to show their cards."
Boeing is keen to prevent Airbus from drawing on public aid to build a rival to the 7E7.
Airbus delivered more jets than Boeing for the first time last year, and so far has 139 orders for its $282 million A380 "superjumbo," which is due to take to the sky in 2006.
Forgeard also acknowledged that there was a growing need for longer-range, mid-sized planes. But with 240 seats in its initial version, Boeing's new plane "is a bit small," he said.
"The economic performance would be better from a larger plane with about 270 seats," he added. "We are thinking about such a plane with several clients."
The new plane would be called the A350, Forgeard said, confirming recent reports in the aviation press.
"Using technologies already developed for the A380 and new-generation engines, it would be very competitive with the 7E7 and, furthermore, based on tried and tested technologies," he said.
Boeing shares fell 19 cents to close at $52.32 Tuesday on the New York Stock Exchange. The shares are up from about $35 a year ago.