US warning over Airbus

The superjumbo A3XX - the US is angered over subsidies

The European Union's financial assistance for the new Airbus "superjumbo" project could set off a new trade conflict with the United States, President Bill Clinton hinted on Monday.

His warning came only hours ahead of Airbus' anticipated launch of the production of the massive A3XX plane, which has been developed at a cost of $10.7bn.

"The president stressed his concern that if that issue is not taken seriously [then it] could be a difficult issue between the U.S. and EU in trade in the future," said his economic adviser Gene Sperling after Clinton's talks with EU leaders at the White House.

In November, the US asked the EU for consultations on the Airbus funding.

Such meetings - unless resolved - often lead straight on to the World Trade Organisation which is expected to be asked to rule on the issue.

Up to a third of the development costs of the "superjumbo" project are due to be paid for by the governments of France, Germany and the UK.

This has led to charges from Airbus' competitor, Boeing, that the "superjumbo" project is economically unviable.

Fifty orders

The production start of the "superjumbo" has been delayed because Airbus was loath to go ahead until it had secured 50 orders for the world's largest commercial aircraft.

Tough talking in Clinton's last EU meeting

Last week, Virgin Atlantic Airways ordered the final six planes needed for Airbus to push on with its plans.

Airbus chief executive Noel Forgeard said in a statement the Virgin deal, along with previous deals, meant the group was in a "strong position" to launch production.

Strong feelings

The A3XX development project has aroused strong feelings in the aviation industry, with the world's two largest manufacturers holding radically different views of the future.

Boeing has maintained that demand for very large planes will be weak and has instead concentrated on building smaller aircraft, which it says will give carriers greater flexibility and efficiency.

But Airbus has argued that the 555-seat jet will take passenger air travel into a new generation of efficiency, comfort and good service.

Virgin - acknowledged as an innovator - already has plans to offer double beds, meeting rooms and massage parlours on some flights.

Industry sources said the airline was now considering facilities such as childrens' play areas, gyms, showers and games arcades for the three-deck A3XX.

If the production of the A3XX goes ahead, then it will oust Boeing from its role as the supplier of the world's largest and most expensive aircrafts.