Subsidy Battle Not Limited To Commercial Aircraft

A member of Congress gave Airbus a bit of friendly advice last week regarding the European aerospace consortium's bid to supply the US Air Force with a new aerial tanker: if you want the USAF contract, then give up launch subsidies from European governments.

Washington State Congressman Norm Dicks, a Democrat, also had nothing but good things to say about an Air Force request for information from Airbus about World Trade Organization sanctions, and about government support the European manufacturer receives from the EU. Those subsidies have been a sticking point between the two countries for over two years.

"It's hard for me to conceive that if Airbus doesn't at least end launch aid for the future, that they can win this competition," Dicks said, according to CBS Marketwatch.

US defense contractor Northrop Grumman -- which is leading the bid to develop the tanker with Airbus -- replied that such concerns about European planes are overblown. Company spokesman Randy Belote added that EADS, which owns 80 percent of Airbus, has pledged to open an aircraft assembly plant in Alabama -- and Northrop Grumman also plans to modify commercial jets into military tankers.

"As we've indicated before, the whole launch aid/WTO issue is a government-to-government issue, and one that is difficult to tie to an American tanker program," Belote said.

Dicks -- who represents workers at Boeing, Airbus's chief competitor for the tanker contract, as well as the hearts, minds, and pocketbooks of airlines around the world -- said the connection isn't so hard to make... and added he can't see Airbus continuing to receive EU subsidies while building a replacement for the American KC-135 refueling tanker.

FMI: www.airbus.com, www.boeing.com, www.wto.org