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Tuesday January 6, 2009
Reuters
EADS May Not Use Airbus State Loans

Airbus parent company EADS said on Friday it had not yet decided whether to draw on possible state loans it is seeking for its new long-haul A350 planes from the British and French governments.

A spokesman for EADS, which owns 80 percent of Airbus, said Airbus merely wanted to ensure it had access to the funds.

"That doesn't mean that we will actually draw on the loan. That will be decided at a later point in time by our shareholders," he said.

A new row is threatening to blow up between the European Union and the United States over the possibility of state funding for the A350, a mid-sized jet intended to compete with Boeing's 787.

Boeing is fighting back against Airbus after losing the lead in plane deliveries in 2003. It had previously dominated the market for decades.

Washington has warned it could resume a World Trade Organization case, suspended in January, aimed at getting the government loans declared illegal under global trade rules.

"Our position is clear -- no new subsidies," a spokeswoman for the US Trade Representative's office said on Thursday.

The United States and the EU had suspended competing WTO cases over government aid for Airbus and Boeing in the hope of reaching a negotiated settlement. However, they failed to achieve that by an April deadline.

Washington says it would still prefer a negotiated solution, and the EU says talks to avert a trade war are still ongoing.

Airbus estimates it will cost EUR3 billion (USD$3.8 billion) to develop the A350, and Chief Executive Noel Forgeard has said he was likely to ask for up to EUR1 billion (USD$1.26 billion) in repayable state loans from European governments.

(Reuters)

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