Friday, September 18, 2009

Airbus confident on European loans for A350

* Airbus confident on A350 development loans
* Talks with Spain progressing well, spokesman says
* Loans come amid WTO trade spat over aircraft subsidies

(Adds quotes, details, Boeing comment)
PARIS, Sept 18 (Reuters) - Planemaker Airbus (EAD.PA) said on Friday it was confident on the outcome of talks with European governments over development loans for its A350 passenger jet, but rival Boeing (BA.N) reiterated its opposition to the loans. An Airbus spokesman said no deal had been signed with Spain, which is reported to have agreed to put up money, and that he was confident on the outcome of parallel talks with Britain.
A French newspaper reported on Friday that Spain was ready to lend 300 million euros as its share of loan funding from four nations in a system criticised by the United States.
Britain last month pledged 340 million pounds in loans but La Tribune newspaper reported that talks on finalising that deal had run into difficulties over the form of the loans.
"Nothing has been finalised (with Spain) and the government will make an annoucnement when it is the case," an Airbus spokesman said.
"We are confident about the talks in the UK," he added.
Airbus is also seeking development loans from France and Germany, which have tentatively pledged to provide 1.4 billion and 1.1 billion euros respectively. Developing the A350 mid-sized jet is expected to cost a total of 11 billion euros.
"The talks with the (four) governments are proceeding well," the Airbus spokesman said.
The loans help to guarantee work for the four nations that founded Airbus, now a subsidiary of EADS (EAD.PA), four decades ago but have been attacked as unfair aid by the United States.
The World Trade Organisation said in a preliminary confidential ruling earlier this month that loans on previous plane projects were potentially harmful unsubsidies and in some cases constituted illegal export aid, according to sources familiar with the case. [ID:nL6438083][ID:nL4598109]
The United States says the European loan system penalises its workers and is no longer necessary to prop up Airbus, which has overtaken Boeing (BA.N) as the world's largest jetmaker. "Today Airbus and parent EADS have a bank balance of more than 8 billion euros," Boeing spokesman Charlie Miller said.
"They have no need for financial support from the taxpayer and should finance aircraft development with their own cash and commercial loans."
Airbus has denied the loans are given on preferential terms.
A European Union counter-suit at the WTO, claiming damage to Airbus from research and infrastructure spending that it says benefits Boeing, will be assessed by WTO judges next year.
The EU says the WTO case on past loans does not apply to the A350 but the United States says reverting to the same pattern of funding could aggravate the WTO's largest ever trade dispute.
(Reporting by Tim Hepher, Matthias Blamont, editing by Marcel Michelson)

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