May 21, 2019 / 8:45 PM / a month ago

Airbus seeks resolution to German arms export row: CEO

PARIS (Reuters) - Airbus is in discussions to try to find solutions to a row with the German government over a ban on arms exports to Saudi Arabia that threatens a border security contract, Chief Executive Guillaume Faury said on Tuesday.

FILE PHOTO: President of Airbus Commercial Aircraft Guillaume Faury attends the Airbus annual general meeting in Amsterdam, Netherlands April 10, 2019. REUTERS/Piroschka van de Wouw/File Photo

The planemaker has warned of legal action against Germany after taking financial charges over the long-delayed border contract between Airbus’s defense unit and the Gulf kingdom.

“We are not yet there,” Faury told reporters when asked about possible legal action.

“We are very much impacted by the situation which is now being extended and trying to find different solutions,” Faury said, adding that Airbus had been forced into a corner by the unexpected national export embargo.

Germany acted alone with a ban in October after the murder of Saudi journalist Jamal Khashoggi in Istanbul, irritating other European arms exporters including France, where Airbus is based. The measure was extended in March.

The row comes as France and Germany study a new combat jet, in which Airbus is the industrial partner on the German side.

Faury said Airbus remained committed to the manned and unmanned system, adding it could be eventually opened to other nations including Britain “as a more united Europe”.

The arms row also coincides with a separate spat with Germany over 600 million euros of development loans for the A380 passenger jet, which Airbus has said it will stop producing.

The Berlin government said in March it was in talks with Airbus about the outstanding loans, which also feature in a separate trade dispute about mutual claims of illegal aircraft subsidies between the European Union and the United States.

Faury said Airbus “would not be where it is” without its project to build the world’s largest airliner.

Asked at a media event whether the separate disputes with Germany could be settled in a single negotiation, Faury said “We just want to execute the contracts as they are and I will not say more.”

Airbus continues to have good relations with Germany and other founder Airbus nations, Faury said at the event, taking place as Airbus celebrates its 50th anniversary as a planemaker.

Reporting by Tim Hepher; Editing by Susan Thomas

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