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Business

Airbus ups its ante against rival Boeing for US airforce contract

Text by News Wires

Latest update : 2010-07-08

Airbus parent EADS submitted a bid to supply a fleet of aerial tankers to the US Air Force Thursday, shortly before the World Trade Organisation announced it had delayed a report on claims that rival Boeing received unfair government subsidies.

 

REUTERS - Airbus parent EADS submitted a formal bid on Thursday to supply a fleet of aerial tankers to the U.S. Air Force, challenging Boeing Co for a contract worth up to $50 billion.
 
The European company said its proposal of more than 8,800 pages, spread over 17 volumes, would prove the "unequaled capabilities" of its tanker, which is based on the Airbus A330 passenger plane and would be assembled in Alabama.
 
The transatlantic foes have been locked in an increasingly bitter battle over the competition, which calls for 179 new planes to renew a fleet of Eisenhower-era refueling aircraft.
 
"We feel very good about what we have to offer," Ralph Crosby, chairman of EADS North America, told reporters.
 
Boeing declined to comment.
 
EADS filed the proposal a day before the deadline for bids, beating out Boeing, which is expected file its own bid based on a version of its 767 passenger jet on Friday morning.
 
But the European company suffered a setback within minutes of its bid when the World Trade Organization announced a delay to a sensitive trade ruling on alleged aid to Boeing.
 
The Geneva-based body said it is delaying a panel decision on a European Union countersuit against U.S. allegations of illegal aid to Airbus, partially upheld by the WTO last week.
 
The new report had been expected July 16, but now could be delayed until mid-September, European Union officials said.
 
European officials had hoped the WTO report on the second case, although meant to be kept confidential for several months, would take the sting out of Boeing allegations that the plane being offered to the Air Force was bolstered by subsidies.
 
The world's largest ever tit-for-tat trade dispute has been marked by frequent leaks.
 
The European Union and Airbus criticized the delay.
 
"The time lag between this case, and the United States' case against support to Airbus ... has constantly increased over the six years this dispute has been running and the gap is now at nearly a year," the EU's executive Commission said.
 
The tanker contest is a rerun of a previous competition won by EADS but later overturned on appeal from Boeing, which successfully argued that the selection process was unfair.
 
U.S. Defense Secretary Robert Gates expressed confidence that the competition would be viewed as fair and transparent.
 
"My view is that the way that it has been designed is as transparent as possible ... So, I think that I am very optimistic that this time we will be able to get on with it," Gates told reporters at the Pentagon.
 
Last week, the WTO ruled that Airbus had benefited from a long history of government subsidies that have hurt Boeing's market share, including prohibited export aid.
 
Backed by supporters in Congress, Boeing wants those criticisms to be taken into account in the tanker contest. So far the Pentagon has declined to link the two subjects.
 
Airbus Chief Executive Tom Enders said the EU case would show Boeing had received billion of dollars in illegal support.

 

Date created : 2010-07-08

  • AVIATION

    US claims victory after WTO condemns 'illegal' Airbus subsidies

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