Aircraft Manufacturers’ “Airing” of Grievances May Soon End

Brussels-based Airbus, yesterday, called for talks between the European Union and the United states, in an effort to arbitrate an end to a protracted, and expensive, fight over subsidies to aircraft manufacturers. The World Trade Organization is ruling on two complaints, one for each side of the conflict: 1) The United States has claimed that European governments loaned Airbus billions of dollars (given the financial state of affairs of the defendants, one has to wonder if they wish that they had that money back) to develop new aircraft, including its newest superjumbo jet, the A380. It is, of course, alleged that this was illegal. This complaint is scheduled to be ruled upon on June 30, 2010. 2) The European Union has filed a counter-complaint concerning U.S. aid to Boeing, which has received billions of dollars from U.S. government agencies to develop military products and technologies that are, later, converted to civilian use.

While these two engage in expensive litigation through the WTO, whose decisions are binding and non-negotiable, the Chinese are revving up to become a third major competitor in the commercial airline market. It is obvious to the United States and Europe that it would be in their best interest to negotiate a settlement to their disputes and focus on how to be competitive with the Chinese, especially in Asian markets. It is a certainty that the Chinese are completely funding their aircraft development.

Hopefully the U.S. and the European Union can clear the “air” on this dispute and work together to remain aloft the market.