Related to 411A's comment, here's what the U.S. Trade Representative says about Airbus in its 2001 report on European Union Trade:
"Since the inception of Airbus in 1967, the Airbus member governments have provided massive direct subsidies to their respective member companies to aid in the development, production and marketing of the Airbus family of large civil aircraft. These subsidies have enabled Airbus to garner approximately 50 percent of new orders over the last three years. According to Airbus’ Chief Executive, Airbus “is now established on a par with its competitor.” The Airbus partner governments have borne a large portion of the development costs for all major lines of Airbus aircraft and provided other forms of support, including equity infusions, debt forgiveness, debt rollovers and marketing assistance, including political pressure on purchasing governments. They have also provided funds to support the development of derivative versions of earlier Airbus aircraft models, such as the A330-200 and the A340-500/600. Some loans for Airbus programs, repayable from royalties on aircraft sold, have been effectively forgiven because projected sales did not materialize.
The Airbus governments continue to subsidize their member companies. On March 10, 2000, the British government announced a commitment of 530 million pounds sterling to underwrite BAE System’s participation in the development of the wings for a new Airbus project, the A380 “superjumbo’ aircraft. The German government has made a political commitment to provide 200 million DM in support for A380 development. The French and Spanish governments have indicated that they are likely to extend A380 funding to their producers as well. European officials have claimed that Member States’ support will be in compliance with the 1992 bilateral Agreement on Large Civil Aircraft; however, the United States believes that government support of Airbus raises serious concerns about Member State adherence to their bilateral and multilateral obligations in this sector, including the 1995 WTO Agreement on Subsidies and Countervailing Measures (SCM). It has urged the Airbus governments to ensure the terms and conditions of their support for the A380's development are consistent with commercial terms, reflecting the fact that Airbus is now a highly competitive global producer of aircraft. Discussions on this issue are expected to continue in early 2001.
Government Support for Airbus Suppliers
Belgium: The government of Belgium and Belgian regional authorities are reported to subsidize Belgian aircraft component manufacturers, which supply parts to Airbus Industrie. In November 2000, the Belgian federal government reached an agreement with the three regional governments responsible for aviation research and development on a BF 7.9 billion (USD 170 million) package for the development and pre-financing of the new Airbus A380. The Belgian government states that it has discontinued an earlier Belgian exchange rate subsidy program which appeared to be similar to a German foreign exchange rate guarantee program that a GATT panel found to be a prohibited export subsidy. The United States has raised this matter in the WTO Agreement on Trade in Civil Aircraft and has also posed questions to the EU under provisions of the SCM which permit member countries to seek and obtain information on the nature of a practice maintained by another member and to clarify why it may not have been notified to the WTO as a subsidy. The EU did not provide substantive answers to the U.S. questions, but stated that Belgium had decided to introduce a new industrial policy, the precise mechanisms of which have yet to be finalized.
United Kingdom: On February 13, the British government announced it would provide up to BPS 250 million in “investment” for Rolls Royce to develop the Trent 600 and 900 engines. The former is to be used in the Boeing 747X and longer range 767-400 ER. The latter engine is to be used on the Airbus A380. This development aid is subject to European Commission review, and while the Commission’s review is ongoing, the United States will be analyzing the effects of this support."
Last edited by Eboy; 28th Aug 2002 at 02:24.