Boeing fights pounds 450m BAe aid

A SENIOR Boeing executive warned yesterday that it would lobby the United States government to prevent the payment of pounds 450m in launch aid to British Aerospace for the development of the new super-jumbo, the Airbus A3XX.

Dick James, the president of Boeing Europe, said it was likely that any launch aid for the 555-seater aircraft would breach an agreement on financial support for large civil aircraft signed by the US and Europe in 1992.

"It is inappropriate for a mature industry like Airbus to ask for subsidy. This is not a commercial loan and unless Airbus can demonstrate that the A3XX is economically viable using conservative calculations any aid would contravene the 1992 agreement. If the US government thought that Europe was not acting in accordance with the agreement it would be very, very concerned."

The four Airbus partners - BAe, DaimlerChrysler Aerospace of Germany, Aerospatiale Matra of France and Casa of Spain - aim to launch the A3XX next year and will seek government support of up to pounds 2.2bn towards the pounds 7bn cost of the programme.

The issue threatens to blow up into another damaging trade war between the US and Europe since the A3XX, if successful, would end Boeing's monopoly of the market for jumbo aircraft.

Despite Mr James' remarks about the A3XX, he said Boeing would welcome BAe as a partner if it wins the contract to build the Joint Strike Fighter, a programme potentially worth $1 trillion. BAe is teamed with the rival Lockheed Martin consortium.