WTO ruling on Boeing, Airbus dispute next week

Geneva: The stage is set for a final decision on a dispute involving both the world's largest air-frame makers - Boeing Co and Airbus. The decision by the World Trade Organization, expected to be handed down next week, is only expected to confirm an interim ruling that European governments unfairly subsidised Airbus's development of its products.

The first A380

The bald fact of the case is that a fledgling enterprise like Airbus took on an aerospace giant like Boeing in the global marketplace and in terms of global sales has now left it behind, at the number two position. Broadly, it is Boeing's case that this dramatic achievement would not have been possible without European government subsidies.

Boeing has protested against its Toulouse, France-based competitor, Airbus's easy access to hundreds of millions of euros in low-interest government loans which it used to develop the A380 superjumbo. It has also complained against European governments persisting with this practise in order to allow Airbus to finance the development of its midsize, long-haul A350 XWB, a futuristic model that competes directly with Boeing's 787 Dreamliner.

Brussels argues that such loans are legal as they are "launch aid" and are repaid by Airbus as and when new planes are sold. Washington argues these are hidden subsidies as they allow Airbus to balance production setbacks and losses should sales fail to meet forecasts.

Airbus produced more aircraft frames in 2009 than Boeing, delivering record 498 units compared to Boeing's 481, to maintain its place as the world's largest airframe maker. It also hauled in an impressive 271 orders for the year, leaving Boeing trailing in its wake at 142.

The dispute was originally filed by the United States with the WTO in 2004. Brussels responded with a countersuit alleging that Boeing benefited from billions of dollars in backdoor funding from NASA and the US defence department.