WTO to rule in June on Airbus complaint against Boeing

The World Trade Organization is set to release a preliminary ruling on the European Union’s complaint against the Boeing Co. in June, according to this report.

This is the counterclaim that the EU is making against Boeing on Airbus’ behalf.

The WTO issued a preliminary ruling in September on Boeing’s claims that Airbus has benefited from illegal government handouts. The WTO agreed in part with Boeing’s allegations that its rival has an unfair advantage due to government backing of its commercial jet programs, including the A330 jet.

Airbus’ parent, EADS, and Northrop Grumman could offer a tanker based off the A330 to the U.S. Air Force in its tanker contest. Boeing has said it wants the Air Force to take the WTO’s ruling into consideration when it awards the $35 billion deal. The Pentagon has declined to do so, saying the ruling is preliminary and that Airbus’ complaint is pending.

Also on the government handout front … the $450 million incentive package given by South Carolina to the Boeing Co. to land the company’s second 787 jet assembly line also could fuel the subsidy debate. Boeing has asked South Carolina officials to keep the details of that arrangement secret, reports The Post and Courier.

But the subsidy issue may not matter if Northrop and EADS decide not to bid in the Air Force contest. Northrop officials said last month that the company won’t bid unless the Pentagon makes changes to its final requirements, due within weeks.

During Airbus’s 2009 results press conference today, Airbus chief Thomas Enders said the Air Force needs to come up with requirements that don’t favor one company over the other.

“If I had a wish free for the new year, it would be for the Pentagon to come up with a fair” bidding contest, he said, in this New York Times story.

Northrop also didn’t like the Air Force’s call for a fixed price for the length of the contract. But Boeing’s defense chief Dennis Muilenburg said today that he doesn’t expect the fixed price to go away.

“I believe fixed-price development will stay in the final” KC-X request for proposals (RfP), Muilenburg said during a National Aeronautic Association-sponsored speech in Arlington, Va, in this Defense News story. “We’ve had a good discussion with the customer on what it takes to make a fixed-price development work.”