Airbus confirms compliance with WTO subsidy verdict as sanctions loom

Airbus has confirmed that it has taken appropriate measures to comply with the World Trade Organization (WTO) ruling on subsidies for its A350 and A380 aircraft.The ruling by the WTO has cleared the way for the U.S. to impose sanctions at the end of what has been a dispute which has lasted 14 years.

It is anticipated that the roles will be reversed later this year as the WTO gives its verdict on the EU’s legal action against support provided to Boeing by the U.S. Airbus’s chief in-house lawyer in the case said he expects a “devastating” ruling on U.S. support for the Boeing 777 and 787 aircraft when the WTO issues its final report.
The current level of tension between the U.S. and Europe may well rise with the threat of aluminum and steel tariffs, while the full impact of the U.S.’ withdrawal from the Iran nuclear pact is as yet unknown.

The claim against Airbus was that it had received subsidized government loans, while the complaint against Boeing is that the company had been in receipt of illegal aid through research grants and tax breaks. Airbus has not confirmed how it is complying with the WTO ruling, but has indicated that with the collapse of Russian carrier Transaero and the consequential reduction in expected deliveries of the A380 to the carrier, will have limited the effect of any subsidies. A European Commission document has indicated it would repay an A350 loan to the UK government this year and reduce the drawdown on additional loans.

In an interview with BBC Today, Karl Hennessee, senior vice president and head of litigation at Airbus, made it clear that Airbus wanted to move beyond the “ridiculousness” of the WTO legal marathon and create a peace settlement with the U.S. not dissimilar to that which exists between Canada and Brazil which has established an appropriate tone for global aircraft export financing.