Home' Asian Aviation : AAV July August 2010 Contents 6 AsianAviation | JULY--AUGUST 2010
The European Union (EU) says it may appeal a
ruling at the end of June by the World Trade
Organisation (WTO), which declared that some
launch aid subsidies to aircraft manufacturer
Airbus were illegal.
In its final report on case DS 316, brought by
the USA against the EU, the WTO says launch
aid is acceptable in the form of repayable loans
offered at market rates. However, it continues,
some of the launch aid provided to the A380
very-large airliner, as well as earlier programmes
in the 1970s and 1980s, was granted at
favourable rates and therefore was an illegal
Boeing and US lawmakers welcomed the
ruling, while EU officials declared themselves
"disappointed", adding that they may appeal.
"This final report needs to be read together
with the forthcoming interim report on
subsidies provided in the US to Boeing," EU
Trade Commissioner Karel De Gucht says.
"The EU remains committed to a negotiated
outcome to the dispute with no preconditions
on either side."
Meanwhile, Boeing hailed the WTO ruling as
declaring "that billions of dollars in European
launch aid subsidies used by Airbus to develop
its commercial airplanes are illegal and must
end". The US manufacturer says it lost as
many as 60,000 jobs because of European
government subsidies to its Toulouse-based
"This is a landmark decision and sweeping
legal victory over the launch aid subsidies that
fuelled the rise of Airbus and that continue to
provide its products a major cost advantage,"
says Boeing Chairman, President and Chief
Executive Officer Jim McNerney. "We now join
the U.S. government in urging full compliance
with the ruling and a permanent restoration of
fair competition within our industry."
US Senator Patty Murray says Airbus could
have benefitted from as much as US$200 billion
in subsidies, research and development grants
and infrastructure support.
The European side argues, however, that the
WTO ruling does not support the argument
that launch aid cost US jobs and hurt Boeing's
"The WTO panel report ... confirms Airbus's
earlier predictions: 70 percent of the US claims
were rejected and wild allegations have been
proven wrong," Airbus says. "Neither jobs nor
any profits were lost as a result of reimbursable
loans to Airbus."
According to Rainer Ohler, the company's
head of public affairs and communications:
"These results are in line with the previous
versions of the WTO panel's findings. Airbus,
the EU and the Member States are closely
analyzing the report in advance of a possible
review by the WTO Appellate Body."
The EU says it will continue providing launch
aid to Airbus's A350 programme while both
sides await the WTO's interim report on the EU
case against the US side. -- Andrzej Jeziorski
EU may appeal WTO ruling on Airbus aid
Vietnam Airlines officially joined the SkyTeam
alliance on 10 June, as the global airline
grouping increases its focus on Asia.
Joining SkyTeam links Vietnam Airlines to
a global network covering more than 850
destinations in 169 countries. The airline's
customers can now earn and redeem frequent
flyer miles when travelling on flights of all other
SkyTeam carriers, while customers of the other
members get the same benefit on Vietnam
"The joining today reaffirms Vietnam
Airlines' position as a major carrier in the
Southeast Asian region as well as a strategic
partner of SkyTeam," says Dr Pham Ngoc
Minh, president and chief executive of
Vietnam Airlines. He adds that the move will
contribute to "the international economic
integration of Vietnam".
"Asia is an important and strategic growth
market for SkyTeam and we well are on
track to strengthen our network offering in
this part of the world," said Leo van Wijk,
the alliance's chairman. "Together with our
current members China Southern and Korean
Air and future member China Eastern,
Vietnam Airlines brings us closer to becoming
the leading alliance for Asia."
Vietnam Airlines adds 20 new destinations to
the SkyTeam network, the chairman says.
The carrier has spent the last 14 months
working to meet the group's membership
requirements, ranging from customer service
elements such as the recognition of frequent
flyer programmes, lounge access and priority
baggage handling, to establishing codeshare
agreements with its 11 alliance partners.
After Vietnam Airlines successfully passed the
required audit in May, the SkyTeam Governing
Board officially approved the membership. --
NEWS IN BRIEF
AIR CHINA has revealed in a statement to the
Hong Kong stock exchange that it will buy
20 Boeing 737-800 single-aisle jetliners. The
carrier signed the purchase agreement on 25
June, saying that the aircraft would be delivered
between 2013 and 2015. The statement says
the manufacturer has granted the Chinese
airline "significant price concessions" from the
US$1.4 billion list-price value of the order. Air
China says the size of the concessions is similar
to the carrier's previous aircraft order from July
2008. All the -800 series 737s will come with
CFM International CFM56 tubofan engines.
Vietnam Airlines joins SkyTeam alliance
The WTO ruling has declared that some launch
aid provided to the A380 programme was illegal.
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