Aviation news: World Trade Organization deems launch aid for every Airbus program illegal

CHICAGO, Illinois - The World Trade Organization (WTO) handed down a final ruling on June 30,2010 that billions of dollars in European launch aid subsidies used by Airbus to develop its commercial airplanes are illegal and must end. The decision, which the WTO made public earlier today, also declares that a broad array of government funding for Airbus research and infrastructure development violated international trade agreements.

"This is a landmark decision and sweeping legal victory over the launch aid subsidies that fueled the rise of Airbus and that continue to provide its products a major cost advantage," said Boeing chairman, president, and chief executive officer Jim McNerney. "The Office of the US Trade Representative deserves tremendous credit for today's decision. We now join the US government in urging full compliance with the ruling and a permanent restoration of fair competition within our industry," McNerney said.

Boeing executive vice president and general counsel J. Michael Luttig explained the details and implications of the ruling. "Each and every instance of launch aid that the US challenged was held to be illegal," said Luttig. "The panel said that without the illegal subsidies it received, Airbus would not have the aerospace market share it now enjoys. This ruling will alter the competitive landscape in the aerospace industry forever, forcing Airbus to compete in the marketplace on the same terms as Boeing."