Airbus chief says A380 to match 777X, pans U.S. tax breaks

Mon May 19, 2014 6:59pm EDT

Fabrice Bregier, Airbus President and Chief Executive Officer attends the Airbus annual press conference in Colomiers, near Toulouse, January 13, 2014. REUTERS/Regis Duvignau

Fabrice Bregier, Airbus President and Chief Executive Officer attends the Airbus annual press conference in Colomiers, near Toulouse, January 13, 2014.

Credit: Reuters/Regis Duvignau

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BERLIN (Reuters) - Airbus will keep evolving the design of its A380 superjumbo in response to Boeing's latest jetliner, the 777X, which has been bolstered by "unacceptable" Washington state subsidies, the head of the European planemaker said on Monday.

Speaking on the eve of the Berlin Airshow, Fabrice Bregier, the chief executive of the plane-making unit of Airbus Group (AIR.PA), lashed out at the $8.7 billion in tax breaks as transatlantic tensions flared anew over mutual charges of unfair aid.

Boeing Co (BA.N) denies the tax breaks were unfair and said Airbus was receiving banned European support.

Airbus said the 777x presented a challenge to its superjumbo.

"We will face after 2020 the challenge of the Boeing 777X. It is clear that as the challenges evolve, the A380 will have to evolve as well," Bregier told reporters, without elaborating.

Bregier said he had grown more optimistic about a possible revamp of the A330 wide-body jet because of strong demand from airlines, but insisted no decision had been taken.

Airbus plans to decide later this year whether to upgrade the wide-body jet with new engines to provide fuel savings and better compete with the Boeing 787 Dreamliner.

"I am probably more optimistic than I was in January because, in January, I discarded the idea, but I can't tell you whether we will launch it or not," Bregier said.

Reuters reported on Friday that the European Union is considering raising the stakes in the world's largest trade dispute by challenging the Washington state tax breaks as part of compliance proceedings at the World Trade Organization.

Airbus has said the tax breaks distort the economics of building Boeing's largest ever twin-engine jet in the state, where most of its commercial operations are based.

Boeing has denied this and said the aid was available to all aerospace companies in the state, including Airbus suppliers.

Bregier reacted angrily to Boeing's statement that it only receives a "fraction" of the state tax incentives.

"This is bullshit," he told the press briefing.

He called on the European Commission to do more to level the playing field against what he saw as unfair competition, and also urged monetary authorities to increase support for European exporters with their currency policies.

"Europe is the only part of world that doesn't look at its currency from the point of view of support to its export industry," he said, noting the Japanese yen had been sharply devalued because of action from policymakers.

"We can sustain an exchange rate of $1.35 - above it is different - but I believe that an acceptable exchange rate for European exporters is $1.25," Bregier said.

He added that Europe had to gain credibility in the way it managed its currency.

(Reporting by Tim Hepher, Victoria Bryan. Editing by Andre Grenon)

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Comments (1)
caminito wrote:
The CHUZPAH of M. Bregier, accusing Boeing of receive subsidies when AIRBUS is the Champion of such (see A350, A400 and A380 between other,
is really Chinese-like

And the desperate intent by AIRBUS to trying to imitate the success of BOEING by upgrading the ultra-successful B777, when the A380 cannot even compete with the present B777-300 except essentially on the trunk routes dominated by the Gulf carriers, is nearly laughable. There is no market for more of such elephants. this being valid for the A380, upgraded of not, neither for the B747-8I, but the latter will subsist with the B747-8F, which can land anywhere a old B747 can!.The present slump of the latter is due to the worldwide still not corrected recession, but this will be surpassed

May 20, 2014 10:13am EDT  --  Report as abuse
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