EADS Chief Gallois Says WTO Ruling Won't Hinder A350, Urges Appeal by EU

European Aeronautic Defence & Space Co. said the World Trade Organization decision that Airbus SAS benefited from illegal subsidies to build some aircraft won’t hinder the development of the A350 plane.

There’s not “a single” current project that’s affected, EADS Chief Executive Officer Louis Gallois told journalists in Aix-en-Provence, France. “The aid that is related to the A350 project isn’t in the scope” of this week’s WTO decision.

The WTO said on June 30 that Airbus, which is controlled by EADS, benefited from support of European governments, with money for the A380 jumbo topping the list of violations.

The panel opinion backed arguments from the U.S. government and Boeing Co. that loans by European governments constituted unfair aid. In the case of the A380, the panel ruled the aid constituted the strongest violation, because interest rates on loans were too low and the support was linked to export performance.

Gallois said today that the decision was mixed and urged European Union authorities to appeal the ruling.

“The WTO clearly indicated that the Americans couldn’t prove that support for Airbus affected Boeing’s competitiveness or employment,” he said.

Boeing, which lost its industry lead to Airbus in 2003, hailed the WTO ruling as a “sweeping legal victory,” and said the verdict called for Airbus to repay $4 billion in illegal launch aid for the A380, a statement that Airbus said is “deliberately misleading” and “wrong.”

The WTO decision spurred Boeing allies in Congress to urge the Pentagon yesterday to penalize a bid from EADS for a $35 billion contract to build a tanker plane for the U.S. Air Force. Even so, Gallois said EADS plans to submit a bid for the contract later this month.

To contact the reporter on this story: Mark Deen in Aix en Provence, France at markdeen@bloomberg.net; Francois de Beaupuy in Aix en Provence, France fdebeaupuy@bloomberg.net.

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