The legal war between the US aerospace firm Boeing and the European aircraft major Airbus is believed to get prolonged due to the economic slow down in the US. The bone of contention is that the payment received by the Boeing for the services rendered to the defense department and NASA is seen as subsidies.
The EU argues that these payments are simply subsidies provided to revive the Boeing and that is completely against the rules of WTO recommendations. As a result of these subsidies between 2004 and 2006 the Airbus further adds that they have incurred losses to the tune of $27 billion.
The US and the EU are engaged in the legal confrontation since 2004. The US claims that the overall loan support from the European governments to the Airbus is very huge and it approximately amounts to $205 billion.
Boeing estimates that Airbus’s share of the global civil aviation market has grown from 37 percent in 2001 to 57 percent in 2006 and contends that the growth is achieved through the illegitimate funds. Unfortunately, both the companies do not come under the purview of WTO because it handles trade issues related to governments. Therefore both parties have to reach an amicable settlement through trade negotiations at the right earnest to find a way out quickly.
The EU and the US are not likely to back track on the financial support offered to the respective aircraft companies, especially in a situation where Russia, China and various other countries engaged in launching their own commercial planes. Any delay in deliveries against the orders received by both the firms would only help emerging companies in this field to gain a foot hold in the rapidly growing industry. Currently, French President Nicolas Sarkozy’s interest in improving relations with the United States is the only hope which could find a speedy solution to this issue.