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Global Economics

Airbus Likely to Seek State Aid for A350

Airbus is set to request state aid for the development of its new A350 midsize jetliner, in a move that could anger US trade partners and amid an escalating row over high-level insider dealing at the flagship European company.

State money is "indispensable" for establishing a level playing field with US competitor, Boeing, the New York Times reported Airbus spokesman Rainer Ohler as saying. "Launch aid is the only available system right now."

EU governments postponed last October an A350 aid package as a good will gesture to the US in a trans-Atlantic state subsidy row, with Washington in the past few weeks repealing tax breaks for Boeing and other US exporters in a reciprocal move.

The A350 project is seen by some analysts as vital in helping Airbus overcome credibility problems related to its A380 super-jumbo project, with technical problems meaning A380 customers might have to wait an extra six or seven months to get their planes.

The first super-jumbo should still roll off the production line by the end of this year.

Airbus finance chief John Leahy said the A380 remains "on track" with "no design issues" that should cause concern to clients.

News of the delay, which could cost Airbus' parent firm, EADS, up to ??2 billion, saw EADS stock crash by 26 percent on the Paris bourse last week however.

Meanwhile, EADS' French co-president Noel Forgeard faced criticism from his German peer Thomas Enders, after it emerged Mr Forgeard and other directors flogged off shares worth millions a few months before the share price went south.

"Of course it would have been lucrative to use the options. But I believed that was not appropriate at the time," Mr Enders told FT Deutschland. "The crisis at Airbus is also a crisis for EADS. But every crisis brings opportunities with it," he told Reuters.

His remarks indicate EADS chiefs knew about the A380 delays at the time when Mr Forgeard sold his shares, with plenty of anecdotal evidence to back up the same idea.

"We have been talking about the delivery delays of the A380 here for a long time, at least two or three months," the owners of a snack bar near the Airbus factory told Le Monde. "It was the great lunch topic."

"When Noel Forgeard said on the radio that he did not know about the delays, I could not believe it," they added.

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