Airbus to call for truce with Boeing

(AFP PHOTO / AIR FRANCE / CHRISTIAN BRINKMANN)

The European aircraft manufacturer Airbus is preparing a private approach to US rival Boeing to end their long-running trade feud, in an attempt to avoid emerging nations eating into their market.

The olive branch is being offered in the wake of a World Trade Organization (WTO) report last week that, despite being confidential, is understood to have decided that US subsidies paid to Boeing worth between $3bn and $5bn were illegal. Airbus, which is owned by pan-European aerospace group EADS, which queried $23.7bn of aid, took the case to the WTO through the EU.

The move was a counter to Boeing's own WTO case against Airbus, which concluded earlier this year that the group had also been given illegal EU subsidies.

Through various appeal processes, the cases could go on for years. The Boeing case has already been going on for nearly eight years.

Airbus wants to negotiate a peace agreement, believing the spat is counterproductive for both parties. However, Boeing sees the process as a matter of principle.

Airbus is concerned that emerging companies in Canada, China, Brazil and Russia are poised to take advantage of the fight and enter their markets with their own state-subsidised aircraft. Although the WTO decisions mean that sanctions can be used by governments against other states that subsidise aircraft manufacturers, these are rarely used in practice so as to avoid escalating tensions in diplomatic relations.

A source close to Airbus said: "We're willing to talk any time, any place. We can both discipline ourselves to have no state aid, but other countries, backed by state funds, can be non-compliant.

'There are many ways that we will contact Boeing about an offer to negotiate, through government officials or the companies themselves."