Airline travel has taken a huge financial hit throughout the global recession, which in turn has decreased demand for new airliners to increase fleets. Large government subsidies have been accepted by aircraft manufacturers that try to boost the bottom line in any way possible. Boeing is the storied American airline manufacturer that was ruled to have taken these government subsidies to give it an edge on European competitor Airbus by the World Trade Organization (WTO), reports Reuters. The $20 billion in subsidies is being challenged by the European Union, according to sources.
WTO pointing toward Boeing and Airbus
It is said the WTO ruling against Boeing is confidential. It will not be released to the public until sometime in 2011. It has been released to some of course. United States and European officials were able to view it. Boeing and Airbus have already appealed case findings of course. Reuters indicates that if initial records of the WTO ruling are accurate, a negotiated settlement between Boeing and Airbus may occur, as the current state of relations in transatlantic aerospace travel is cold at best. In June 2010, Airbus got in trouble for the exact same thing. It got a cash advance as a government subsidy from the EU then.
Numerous upset by the tax breaks and research contracts
This may be an example of one power crying foul because they were reprimanded for the very thing that the other power is at the moment attempting to get away with. National Aeronautics and Space Administration and also the Pentagon gave Boeing $17 billion in research contracts. Also, It got a sweet tax break in Washington State of $4 billion, says European sources. WTO ruled that Boeing broke international trade laws by accepting the contracts and tax breaks, despite the fact that 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.
Hope that President Obama take part
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. However, United States of America officials have opposed coming to the table unless the EU stops subsidizing the production of the Airbus A350, which United States of America officials feel is really similar to support the World Trade Organization has decided against. 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
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