Airbus-Boeing ruling could end up hurting both
Associated Press
Friday, September 04, 2009

WASHINGTON --- However the World Trade Organization rules today on a trade dispute between Boeing and Airbus, its decision could help slowly loosen the grip the two plane makers have held on the lucrative market for commercial planes.

On the surface, the WTO will decide a 5-year-old U.S. complaint that European governments unfairly financed Airbus' climb to the No. 1 position. But the ruling might also signal how much other nations should be allowed to subsidize their industries. China's aviation industry, for example, wants to compete with Boeing and Airbus for a share of the jetliner market, expected to be worth $3.2 trillion over the next 20 years.

The WTO decision isn't expected to have much immediate effect on Airbus and Boeing. A separate WTO ruling, on a claim against the U.S. from the 27-nation European Union, is expected in six months. Current projects -- jets like Boeing's 787 and Airbus' A350 -- will remain on track. Passengers are unlikely to see changes to ticket prices as a result of the dispute.

But in the longer term, competition could escalate from countries eager to aid their growing aircraft makers. China, India and Brazil are competing in the market for smaller regional jets and aspire to cut more deeply into the Boeing-Airbus dominance over big passenger planes.

Boosted by state subsidies, the Brazilian company Embraer and Canada's Bombardier already have cut into the market for smaller regional jets designed for shorter flights. Over the past decade, Brazil and Canada have defended themselves in WTO disputes over government aid for their industries.

Boeing is looking to the WTO to set guidelines for how the long-term competition over planes will proceed.

"We are hoping these rules will give clear guidance to all companies that want to develop large civil aircraft," said Ted Austell, a vice president for Boeing.

From the Friday, September 04, 2009 edition of the Augusta Chronicle
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