Airbus set to ask for more state aid

TOULOUSE, France, June 19 (UPI) -- Airbus SA's continuing A380 super jumbo jet delivery delays now appear to be resulting in the prospect of requests for more European state aid.

The French aerospace company is preparing to ask its parent company, European Aeronautic Defence & Space Co., for billions to help it develop a long-range jet designed to compete with Boeing's 787.

If such a request comes through, the Franco-German conglomerate is expected to ask lawmakers in Paris and Berlin for more subsidies, the International Herald Tribune reported Monday.

Granting such requests would almost surely create turbulence with the United States, which already is seeking to have state aid for Airbus's A380 curtailed.

"This is no longer a mere product-development launch aid, it is a rescue package: This aid is absolutely essential," said Richard Aboulafia, an analyst at Teal Group, an aerospace and military consulting group based in Fairfax, Virginia.

U.S. trade negotiators respond by saying Europeans need to understand that yet more largesse for Airbus means a full-out trade war at the World Trade Organization.