Boeing unfazed by EU subsidy appeal

FARNBOROUGH (Reuters) - Boeing (BA.N) expressed confidence on Wednesday in the outcome of a European Union appeal over aircraft subsidies and renewed pressure on its rival Airbus to pay back or restructure European state loans.

The comments in interviews with Boeing representatives at the Farnborough Airshow came after the European Union appealed a World Trade Organization ruling condemning subsidies for Airbus, prolonging a dispute with the United States.

"We are as confident in the outcome of this appeal as we were when the United States originally filed the case," Boeing lawyer Robert Novick, a partner at law firm WilmerHale, told Reuters at the airshow.

"We fully expect the appeal process to be concluded by year-end."

European officials have suggested the dispute over mutual accusations of illegal aid to aircraft manufacturers could drag on for years and is best resolved in negotiations.

The United States says its complaints against the EU are separate from an EU counter-suit against alleged U.S. aid to Boeing.

"We believe that by the end of the year this process will have run its course and the EU and Airbus will find themselves needing to meet their obligations," said Ted Austell, vice president of executive, legislative and regulatory affairs for Boeing government operations.

Novick brushed off the EU appeal.

"We were expecting a broad appeal as they lost on almost everything. We fully expect a decision by year-end and then the clock starts ticking on compliance," Novick said. A WTO panel report said three out of four government loans for the A380 development were prohibited export subsidies and ordered them remedied without delay.

Boeing and Airbus have sparred over what this means, since the report does not make specific recommendations.

"The A380 loan is simply like a mortgage on terms that are unfair and a loan that the market wouldn't have provided," Novick said.

"To comply with the ruling they must repay it or restructure it."

Boeing officials also called for a fair fight in a competition with Airbus to supply refueling planes to the U.S. Air Force, but stopped short of calling for the two issues to be linked.

Boeing supporters in Congress have called on the Pentagon to penalize Airbus in the contest due to the WTO subsidy findings.

"Boeing has never wavered in its desire to have a level playing field, which is particularly important in a fixed price competition," Austell said.

(Reporting by Tim Hepher)