UK to give Airbus wings, pledges $565 mn in loans

LONDON/BRISTOL: Britain pledged ��340 million ($565 million) in loans to European planemaker Airbus to win work, in a move set to aggravate a transatlantic dispute over aerospace industry aid. Britain agreed to the loan on Friday to make sure parts for Airbus���s planned A350 widebody passenger jet are built in Britain, but it is likely to face fierce opposition from the United States and Airbus���s arch rival Boeing.

Business minister Peter Mandelson, at Airbus���s Filton plant, near Bristol, western England, said the support package would create and sustain more than 1,200 jobs there and at Broughton, north Wales, as well as more than 5,000 jobs in the supply chain across Britain. Airbus, owned by European aerospace company EADS, has been looking for loans from European governments to help get the e11 billion ($15.7 billion) project off the ground, in exchange for work to be shared out around the continent.

Germany would provide e1.1 billion and France 1.4 billion, German and French officials have said. However, the loans have been disputed and the World Trade Organisation is expected to deliver a preliminary ruling in the first week of September in a case brought by the United States against European Union launch aid for Airbus. A report into a counter suit by the EU over Boeing subsidies will follow. ���It���s senseless tit for tat. There are two legal cases, one launched by the US, one by me (when Trade Commissioner at the EC). I did not welcome it, but it was inevitable once the Americans started down this course,��� said Mandelson.