Airline travel is seriously hurt with the global economic downturn which is why expanding fleets for new airlines is no longer a thing asked for. Thus, aircraft producers are willing to make use of any means necessary in order to boost the net income, including accepting large – and maybe questionable – government subsidies. Reuters explains what the World Trade Organization (WTO) ruled when it comes to the American airline manufacturer, Boeing. Boeing was said to have an unfair advantage over European competitor, Airbus, because it took out the government subsidies specifically for this purpose. The $20 billion in subsidies is being challenged by the European Union, according to sources.
WTO points out what’s going on with Boeing and Airbus
The WTO judge’s ruling against Boeing is at the moment confidential and will not be officially released until mid-2011. It has been released to some of course. United States and European officials were able to see it. Boeing and Airbus have already appealed case findings of course. Reuters explains that relations between aerospace travel in the transatlantic are bad right now. This is why it is weird that the WTO ruling may mean Boeing and Airbus may have to come up with a settlement. Airbus was previously condemned in June 2010 for taking a sizable cash advance in the form of a government subsidy from the EU.
Is apparently research contracts and tax breaks
This may be an example of one power crying foul because they were reprimanded for the very thing that the other power is presently attempting to get away with. European sources explain that in Washington state, Boeing got $4 billion in tax breaks when also getting $17 billion in research contracts from NASA and the Pentagon. WTO ruled that Boeing broke international trade laws by accepting the contracts and tax breaks, although the government aid is not technically prohibited. There is a claim that Airbus was glad about the contention. Boeing said Airbus got a stern glance in there. Boeing felt like what happened was unfair as its actions were acceptable.
Wanting President Obama’s advice
Reuters got EU trade spokesman John Clancy’s opinion. He said “negotiations at the highest political level” may be the only thing that will keep Boeing and Airbus from fighting. U.S. officials have claimed they will not come to the table until the EU no longer subsidizes the production of the Airbus A350. The United States thinks that what the World Trade Organization decided against is the same thing the EU is doing. Boeing said that Airbus is doing everything wrong with the EU although Boeing is doing nothing to harmed the transatlantic aerospace market.
Airbus
airbus.com/
Boeing
boeing.com
Reuters
reuters.com/article/idUSTRE68E47T20100915
WTO and Boeing have had better days
youtube.com/watch?v=50fqfmWbXiY
