- Airbus File Photo
The City of Mobile Alabama and Airbus were dealt another blow today when the World Trade Organization (W.T.O.) published a ruling saying that European governments provided Airbus with illegal subsidies. While most of the findings have already been reported, this document provides information on the entire ruling and thus, makes it official. Please go to the following link for the full report: W.T.O. Issues Report on Airbus Dispute.
While Airbus/Boeing and the United States/ EU have been fighting over this issue for a while, the ruling, which was initially announced in June, really came as no surprise to those within the aviation industry. Rumors of foreign subsidies have long plagued Airbus and it pricing and financing structure.
In its finding the W.T.O. found that governments of the EU provided illegal funding to Airbus through risk-free loans, along with infrastructure and research funding, to help beat Boeing. It is unknown how much of the illegal funding was part of the tanker contract that Airbus was bidding on with the Pentagon. Further, is not clear as to how this ruling will affect the rebid on the upcoming tanker contract that closes on July 9, 2010.
Both sides have 60 days to appeal, but this ruling comes at a very inopportune time for Airbus with the tanker bid deadline just days away. And, at this point, what’s bad for Airbus is also bad for the City of Mobile.
