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Last Updated: Friday, 7 October 2005, 15:14 GMT 16:14 UK
EU-US step up row over air aid
Artist impressions of Airbus A350 (top) and Boeing 787 Dreamliner (bottom)
Airbus will directly rival Boeing's Dreamliner (bottom) with the A350 (top)
Airbus has stepped into the EU-US row over state aid for the two planemakers, saying it still gets less help than its US rival Boeing.

Chief executive Gustav Humbert also appealed to the US to step away from the brink of a trade war on the issue.

But Washington has ignored the plea, saying it will press ahead with action at the World Trade Organisation.

The move comes a day after Airbus said it was developing the A350 - designed to compete with Boeing's Dreamliner.

What we want is a level playing field
Gustav Humbert, Airbus

The European firm, owned by EADS and BAE Systems, said that it had decided to turn away contentious state support while talks over the state aid row continued.

'Detrimental' aid

At a news conference, Mr Humbert added that state support for the project would be negotiated over the next two months, but also noted the firm would be able to fund the plane through its own cash or the usual market options available.

He also explained that US anger over state help for Airbus masked the fact that the firm gets less backing than Boeing.

"What we want is a level playing field," he said. "Our US competitor gets a lot of support, most of which is not even refundable, like tax breaks.

"This is detrimental to Airbus."

The US Trade Representative's office said any offer of aid to Airbus was "completely unacceptable", adding it could "take no comfort from any offer to postpone" aid payments promised to Airbus by European governments.

Talks continue

The spokesman for EU trade chief Peter Mandelson, said the US reaction to Airbus's stance was "surprising".

He added Mr Mandelson would be in touch with his US counterpart to find out whether the US had now abandoned negotiations on the issue and were set on taking action at the WTO.

The WTO is already investigating tit-for-tat accusations that the US and EU unfairly supported their biggest plane manufacturers - with both sides claiming the aid gives the other an unfair market advantage.

Mr Mandelson and US Trade Representative Rob Portman will discuss the matter on Monday in Switzerland, the spokesman said.

Meanwhile, German Chancellor Gerhard Schroeder threw his weight behind the European planemaker accusing Boeing of getting "massive support ... through generous financial aid from various sources and military contracts".

Boeing has denied it receives huge amounts of state funding.




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