WTO finds Boeing got billions in illegal subsidies, but how many billions?

While most are familiar with the bruising battle between Airbus and Boeing for market share as the only two competitors left in the large passenger jet market, with new competitors from Canada, Brazil, and China in the small passenger market nipping at their heels, it is the legal battle at the WTO between the two giants that is drawing the most blood.  Boeing and Airbus have been tied up in WTO litigation for years, each accusing the other of receiving various forms of subsidies from governments, all of which are illegal under WTO rules.  Boeing won a key victory last year when the WTO ruled Airbus did receive illegal aid, but this week the WTO signaled it would be handing Airbus a victory as well.  There are still major disagreements over which side received more subsidies, and over what to do next.

WTO finds Boeing got billions in illegal subsidies, but how many billions?

Aviation World at Odds Over Loans for Aircraft

This week, negotiators from the U.S., E.U., Japan and Brazil are meeting to discuss the sensitive topic of how airliner sales should be financed and how much government assistance should be permitted to state-owned airlines in buying new aircraft.  Under a current "home-market" rule, airlines based in the U.S., France, Germany, Britain and Spain cannot use government loans to help them buy aircraft.  That may change under a new agreement.

Aviation World at Odds Over Loans for Aircraft - NYTimes.com

Bumpy Ride Ahead for Air Industries

Airlines are consolidating and becoming more efficient. Airfares are going lower. Temporarily stored planes are being dusted off and returned to service. This is good news for airlines, but not good news for Boeing and Airbus, who after decades of bitter competition are facing new market realities about their future. A bruising WTO battle that has drawn blood from both sides, plus renewed competition from Bombardier, are adding to their problems.

Special Report - Aviation - Bumpy Ride Ahead for Air Industries

Emirates Orders 32 Airbus A380

The United Arab Emirates is tiny -- Dubai's population is only 3.5 million. So why would the state-owned airline Emirates order 32 more giant double-decker A380's, making it the sole operator of roughly 40% of A380's worldwide? The answer is that Emirates is taking aim at traffic from other countries' traffic rights. Its latest target is Lufthansa and the huge German market -- by placing the order with Airbus (Germany is a huge shareholder in the Airbus parent company), Emirates is daring Germany to open the market and stop protecting Lufthansa. In doing so, Emirates may be re-writing the rules of open competition in the airline industry.


Emirates Orders 32 Airbus A380 - WSJ.com

W.T.O. Rules Against Aid to Airbus Jets

The WTO has ruled that launch aid to Airbus to develop the A380 was illegal. The launch aid, mainly in the form of loans that did not have to be repaid if the program didn't make any money, helped Airbus leap ahead of Boeing in 2003 in number of jets sold. If Airbus does not pay back the launch aid, the U.S. could retaliate by imposing tariffs on a wide variety of European goods. Still to be decided is Airbus' counter-suit alleging illegal U.S. subsidies to Boeing. That decision is expected later this year.
W.T.O. Rules Against Aid to Airbus Jets - NYTimes.com