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Airbus' new rival to 7E7 may utilize subsidies

By Seattle Times news services

Airbus CEO Noël Forgeard discussed A350 plans.

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Chief Executive Noël Forgeard, speaking yesterday to British newspaper journalists in an interview at Airbus' headquarters in Toulouse, France, said Airbus may announce later this year a plan to develop a new aircraft, based on its existing A330-200 and A330-300 models, that would use new engines and fly 1,000 nautical miles farther than those planes.

According to Barbara Kracht, an Airbus spokeswoman who was present at the interview, Forgeard said development costs for the A350 would be between 2 billion and 3 billion euros ($2.5 billion to $3.74 billion) and that Airbus would apply for government loans for 33 percent of those costs, or between 700 million and 1 billion euros ($874 million to $1.25 billion).

"We will, of course, apply for government loans, but can also do without, because the A350 is only a derivative," he said.

The U.S. criticized Forgeard's comment, and said it justified their decision this month to file a trade complaint against the European Union over Airbus aid.

"He flouted the fact that Airbus would ask taxpayers to foot the bill even though Airbus can afford to fund the plane itself," said Neena Moorjani, a spokeswoman for the U.S. Trade Representative's Office. "It's time to level the playing field."

The U.S. and European Union this month filed complaints at the World Trade Organization over the fairness of government subsidies to Airbus and Boeing.

Yesterday Airbus also said it had raised its expected deliveries target for 2004 by 5 percent to as many as 320 planes.

Airbus expects to deliver a near-record 315 to 320 planes this year, and more than that in 2005 and 2006, a company spokeswoman said. The planemaker previously said it expected more than 305 deliveries.

Airbus delivered more aircraft than Boeing for the first time in 2003, delivering 305 planes compared with 281 for Boeing. This year, Boeing plans 285 aircraft deliveries, rising to as many as 320 in 2005.

Information from Bloomberg News and Reuters is included in this report.

Copyright © 2004 The Seattle Times Company

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