Airbus Discussing Launch Aid With European Governments for a Potential Upgraded A380

PARIS (The Seattle Times/TNS) —

Airbus CEO Fabrice Bregier said Thursday that if the company pulls the trigger on a new version of its giant A380 superjumbo jet, it will seek launch aid from its European host governments — even though it has not yet fully repaid the $3 billion in launch aid it got for the initial version of the jet that entered service in 2007.

Bregier said that no decision to go ahead with the so-called A380neo has yet been made, but that discussions on launch aid with the governments have occurred.

“That’s absolutely true,” he said in an interview at the Paris Air Show.

“If we want to launch an evolution of the A380, we would probably require some form of support from the governments,” Bregier said, quickly adding that it “will be fully WTO compatible.”

Airbus has been under pressure, especially from top A380 customer Tim Clark, CEO of Emirates, to upgrade the giant jet with new engines, and it has emerged this week that Airbus may also decide to stretch it, adding as many as 100 seats. That would be an expensive upgrade.

Bregier conceded that the original A380 launch aid has not been repaid yet, but said, “We have repaid a big chunk of it.” He declined to be more specific.

He went on to defend the Airbus position indirectly by attacking Boeing’s successful push in 2013 to extend aerospace tax breaks in the state of Washington in return for building the 777X.

“We have not got $8.7 billion of illegal tax credits,” Bregier said. “And we have not blackmailed our nations that we would assemble any A380 new version outside our four countries just to get illegal subsidies.”

Boeing commercial airplanes chief Ray Conner was asked at a Paris Air Show press briefing Tuesday about the possibility of Airbus seeking more launch aid.

“It’s pretty clear that’s a path they are intending to go down,” Conner said. “I don’t have firm intelligence.”

As for the tax breaks in Washington state, Conner said, they are available to any aerospace company, not just to Boeing.

Two World Trade Organization rulings in 2010 found both manufacturers had separately breached internationally agreed-upon subsidy rules.

In the case against the U.S. government, the WTO ruled illegal the Washington state tax breaks that benefit Boeing. In the case against the European Union, the WTO ruled illegal some of the previous funding Airbus received to launch earlier jets, including the original A380.

Five years later, both governments are still engaged in prolonged negotiations over how to comply with the rulings and what constitutes compliance. In the meantime, neither jet maker appears to have changed its behavior substantively. Clearly, the thorny issue remains very much alive.

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