EasyJet plane order rekindles Airbus-Boeing subsidy row

Tue Jun 18, 2013 3:46pm EDT
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PARIS (Reuters) - An order for more than 100 Airbus passenger jets by UK low-cost carrier easyJet (EZJ.L: Quote) has re-ignited a long-running trade spat between the European planemaker and U.S. rival Boeing (BA.N: Quote).

EasyJet announced the $10 billion order for 100 A320neo medium-haul jets, together with 35 current-generation A320 aircraft worth $3 billion at list prices, on Tuesday, day two of the Paris Airshow.

EasyJet began operation in 1995 with Boeing aircraft, but shifted to Airbus in 2002 with a 120-plane order that followed a bitter competition between the world's largest planemakers.

That 2002 deal later became part of the world's largest trade dispute, with the United States and the European Union accusing each other of helping their planemakers with unfair subsidies.

"Airbus' original capture of easyJet as a customer was a key part of the U.S. complaint in the World Trade Organization about the massive harm that illegal government subsidies to Airbus has caused Boeing," Boeing spokesman Charlie Miller told Reuters by email on Tuesday.

"Airbus' recent sales to easyJet are a continuation of the harm that resulted from Airbus having been able to 'flip' EasyJet as a customer. This is another vivid reminder as to why the EU must finally put an end to market-distorting launch aid."

Airbus hit back with a salvo against Boeing's 787 Dreamliner, on the day the U.S. company announced a new, larger version of the jet.

"This is an insult to (easyJet's) rigorous evaluation that clearly saw the A320neo winning," Airbus spokeswoman Maggie Bergsma said, referring to Boeing's comments.

"If we were to apply the Boeing logic on the WTO rulings, the 787 would not exist if not for subsidies."   Continued...

An Easyjet airliner lands for the opening of a new base of the low cost airline at Nice International airport March 21, 2012. REUTERS/Eric Gaillard