Airbus calls for talks with Boeing in WTO dispute

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By Greg Keller ASSOCIATED PRESS

PARIS | The head of Airbus' parent company says the European jet maker did nothing wrong in a trade dispute with the United States over government subsidies, and called for a negotiated settlement with archrival Boeing Co.

In an interview published Wednesday, EADS N.V. chief Louis Gallois also defended the system of government launch aid for Airbus, saying it was more transparent than "opaque subsidies" that he said Boeing receives.

Mr. Gallois spoke to the French business daily La Tribune in his first interview since a preliminary World Trade Organization ruling last week that European loans for Airbus amounted to illegal subsidies.

"Airbus does not plead guilty, and will produce arguments in its defense," he was quoted as saying.

A separate WTO panel is hearing a European Union counter-complaint against the United States that claims the Pentagon and NASA are indirectly subsidizing Boeing. A ruling is expected in about six months.

Mr. Gallois said EADS "has always favored a new agreement" to end the dispute, but added that if no accord can be reached, both disputes will carry on until a final decision is reached, expected in 2012 or 2013.

Last week's ruling has cast a shadow over Airbus and Boeing's competition for a $35 billion contract for an aerial refueling tanker for the U.S. Air Force.

EADS and its U.S. partner Northrop Grumman Corp. won a previous competition for the contract, but the decision was overturned after Boeing appealed and a congressional audit concluded that the Air Force had unfairly penalized Boeing's smaller plane.

Mr. Gallois said EADS expects to receive a first version of the Air Force's new tender offer for the aircraft this month, after which the companies have two weeks to respond.

"We are totally determined to go for it, except if it looks like the tender is biased," he said.

Asked about Airbus' long-delayed A400M military transport program, Mr. Gallois said there is "a serious chance" for the new aircraft to achieve its target of a first flight by the end of the year.

"This plane has caused us enough problems -- so we don't want to appear overly optimistic," Mr. Gallois said.

The A400M program is being developed by Airbus and EADS, and was launched in 2003 with an order for 180 planes from seven governments. It has been plagued by costly delays.

The EADS chief was also cautious on the progress of Airbus' A350 program, a new extra wide-bodied airliner designed to compete with Boeing's long-delayed 787 Dreamliner.

"For the time being we're on track, but considerable challenges remain" to hit a target launch date of 2013, Mr. Gallois said.

Airbus is on target to deliver the same number of planes this year as in 2008, he said, while warning that it will take until next year to fully ascertain the fallout of the global economic crisis on its business.