Exclusive-Boeing asks US to intervene over record EU loan to Airbus

By Tim Hepher and David Shepardson

FARNBOROUGH, England, July 21 (Reuters) – Boeing has asked the U.S. government to press the European Union for transparency over a €3 billion ($3.43 billion) loan package to Airbus, resurfacing trade tensions after the two sides extended a tariff truce over jet subsidies.

The request for the U.S. ‌government to intervene comes as Airbus has been talking about the development of a new plane as early as 2030, potentially kickstarting a fresh wave of ‌competition in the global jet market.

Both sides won partial victories in a 17-year battle at the World Trade Organization over mutual claims of aircraft subsidies that led to a wave of transatlantic tariffs hitting other industries, ​before agreeing a five-year truce in 2021.

The truce, which was set to expire on July 6, has been extended indefinitely as both sides draw back from a renewed trade war in aerospace.

In a letter to U.S. Trade Representative Jamieson Greer, seen by Reuters, Boeing said it had been surprised by a June 29 announcement from the European Investment Bank, the EU’s lending arm, committing to its largest-ever corporate loan for Airbus.

It asked the USTR to request a “full accounting of the terms of this loan” from the EU and to explain why it was ‌compatible with the 2021 truce agreement, which called for an “open ⁠and transparent process.”

Greer told CNBC the USTR is looking at the loan “very closely” and that he had raised it with his EU counterpart.

“We can’t accept a situation where companies don’t have to operate under market-based systems, where Boeing has to operate and compete against an Airbus ⁠that gets unfair loans,” Greer said.

Such comments echo the 17-year WTO dispute in which Airbus and Boeing repeatedly claimed victory and accused each other of benefiting from unfair support. The WTO termed earlier EIB loans to Airbus subsidies, but dismissed U.S. claims about their role.

However, Boeing noted that the announcement, which included an initial tranche of €1 billion, came just four days after the EU adopted ​the ​decision to extend the standstill agreement.

“At a minimum, the timing of this loan is surprising,” Boeing ​said in its letter.

The EIB said it finances thousands of companies ‌every year and denied offering Airbus any unusual support.

“This is a normal loan, carrying interest, part of the EIB’s overall financing activity,” a spokesperson said.

Airbus Chief Financial Officer Thomas Toepfer told reporters in London that the loans had been taken out “completely at market level”.

Boeing declined to comment. The USTR and European Commission did not immediately respond to requests for comment.

AIRPLANE DEVELOPMENTS

In its loan announcement, the EIB said the package of loans would support Airbus’ long-term investments through 2030.

Boeing noted that this is the same year in which Airbus CEO Guillaume Faury has said Airbus plans to begin the development of an A320neo successor.

In an interview with Aviation Week ahead of the Farnborough Airshow, Faury spoke of a new plane ‌in 2030 and disclosed the internal code word for the project, “eAction.”

“The timing of this significant loan ​also coincides with Airbus leadership remarks publicly committing to a launch date of a new airplane, which further ​raises questions about both the size and the intent of this historic economic ​assistance package,” Boeing’s letter to the USTR said.

Boeing has said market conditions are not yet right for a new generation of planes, although ‌analysts say both companies are expected to start the next developments ​by the mid-2030s.

Boeing’s letter underscores wariness over competitor ​funding on both sides of the jet market duopoly, though tensions have eased considerably since the WTO subsidy battle.

The Trump administration last year agreed to exempt aerospace from tariffs after briefly imposing duties.

Washington has not officially said it is extending the separate truce on tariffs tied to the Airbus-Boeing dispute, but four people familiar ​with the matter said both sides had effectively buried the ‌marathon WTO dispute for the time being.

While the Trump administration has repeatedly used tariffs, it is seen as reluctant to make use of WTO tools ​that would implicitly recognise multilateral rules the president opposes.

Trump called this month for talks with trading partners to address the impact of foreign jet ​imports.

($1 = 0.8754 euros)

(Reporting by Tim Hepher, David Shepardson; Editing by Sharon Singleton and Nick Zieminski)