The two big aircraft-makers battle it out at the World Trade Organisation

NOT a lot has gone right for Boeing recently. After declaring to the world at the Paris air show in June that its chronically delayed 787 Dreamliner would take to the air before the month was out, executives were forced to announce an indefinite postponement of the high-tech aircraft’s first flight only days later because of a problem with the wing mounting. The company also seems to have been hit harder by cash-strapped airlines cancelling orders than its main rival, Airbus. But Boeing is anticipating a triumph in the next few weeks when the World Trade Organisation (WTO) comes to a preliminary decision on a complaint made by America nearly five years ago about subsidies given to Airbus by European governments.

In 2004 at the urging of Harry Stonecipher, Boeing’s boss at the time, America terminated a 1992 agreement with the European Union regulating government support for the commercial-aircraft industry and initiated a WTO dispute-settlement procedure. The agreement had capped European launch aid for new airliners at 33% of all development costs on condition that the money was repaid at an interest rate that at least covered the cost of the governments’ own borrowing. For their part, the Americans were allowed to continue with indirect federal and state support for their aircraft industry as long as the payments did not exceed 3% of the industry’s sales. Much of the subsidy received by Boeing comes in the form of research contracts for its military arm, the results of which can then be applied to its civil aircraft without charge. …