August 29, 2008 / 2:57 PM / 11 years ago

EADS denies Airbus in plane talks with Syria

PARIS, Aug 29 (Reuters) - European aerospace group EADS EAD.PA denied on Friday that its Airbus planemaking subsidiary is in negotiations to sell passenger jets to Syria.

Speculation of a deal has risen prior to a visit by French President Nicolas Sarkozy to Damascus next week, but such a sale could anger the United States, which controls the export of many aircraft components.

“We are not currently discussing any deal on Airbus planes with the Syrian airline or authorities,” an EADS spokesman said.

Reuters reported on Thursday that Airbus was discussing a deal that could secure a multi-billion-dollar order from the Syrian government, according to sources familiar with the talks, but that U.S. sanctions could torpedo the purchase.

Such a deal would involve the possible lease and purchase of a total of 54 aircraft between now and 2028 and help from Airbus to restructure Syria’s flag carrier Syrianair, according to the sources. Contacted again on Friday, two sources repeated their version.

U.S. sanctions, imposed on Syria in 2004 for its support for anti-American groups, are seen as a major obstacle to any Airbus sale to Syria.

A way around the sanctions could be if a limited number of aircraft were to be purchased by another airline or operator outside Syria, and then leased to a Syrian company, an industry executive told Reuters on Thursday.

Another source said the cooperation agreement would amount to little if no legal way could be found to conform to the sanctions, with French officials assuring the United States that Airbus had no intention of breaking them.

Airbus with a U.S. partner is competing for a $35 billion Pentagon tanker refuelling deal and is anxious not to cause further political waves over the deal in a U.S. election year.

France started re-engaging Damascus in recent months after the Syrian government embarked on indirect peace talks with Israel and a protracted political crisis eased in Lebanon.

Sarkozy’s visit will be the first by a Western head of state to Syria since the 2005 assassination of Lebanese statesman Rafik al-Hariri.

Syrian President Bashar al-Assad told France’s Inter Radio during a high-profile visit to Paris last month that Syria wanted to order Airbus jets.

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