The European nations which are home to the production of Airbus jets have agreed in principle to support its next model, the A350 XWB, but want to see research, development and production stay substantially in Europe, ministers said.
"We support Airbus. We want together to ensure it has the necessary support to make it competitive worldwide," German government aerospace spokesman Peter Hintze said at a news conference of the Airbus ministers at the ILA Berlin Air Show.
Airbus had made a request for state aid, the ministers said, though no decision had been made on the amount of money. This would involve providing repayable loans to help Airbus develop the A350 to take on rival Boeing's 787 Dreamliner.
"We have not talked about concrete sums today. That is clear," Hintze said on Tuesday, adding any support would have to comply with World Trade Organization and European Union rules.
Airbus's chief executive, Tom Enders, and the head of Airbus parent EADS, Louis Gallois, both renewed calls on Tuesday for a "level playing field" with rival Boeing.
Both companies, which control the market for passenger jets over 100 seats, accuse the other of taking illegal subsidies and have taken their cases to the World Trade Organization.
In a newspaper interview on Saturday, Gallois said Boeing had received USD$800 million from the US government for research and technology in 2006 whereas Airbus had received EUR60 million euros. But Boeing dismissed the figures.
"The calculations are clearly based on the same flawed methodology that the European Commission has used in its WTO case, which the US has discredited and which is based on attributing to Boeing funds it never receives," a European spokesman for Boeing said.
"At the same time, the Commission's latest framework program provides more than USD$2.5 billion for aeronautical R&D," he said, adding it would be "disingenuous" to suggest Airbus is starved of this as well as national research funding.
Founded in 1970, Airbus was originally an industrial consortium backed to varying degrees by four countries -- France, Germany, Spain and the UK -- but is now wholly owned by EADS, which does not include any British interest. Britain, however, maintains a seat in a ministerial oversight group of the four nations which still host the bulk of Airbus production.
Hintze warned that the company should not sacrifice production in Europe simply because of current exchange rates, as the situation could change again in the future.
Airbus is under pressure to spread its production globally to combat the effect of a weak dollar. But any A350 development loans would likely be tied to willingness to maintain most of the 55,000 high-tech Airbus jobs in Europe.
"I am absolutely convinced that Airbus can only stay competitive in the 21st century if Airbus keeps on the one hand strong European roots, but internationalizes to a much greater degree than we have hitherto seen," Enders said.
Airbus has embarked on a cost saving program, dubbed Power8, aimed at saving EUR2.1 billion annually and cutting 10,000 jobs by 2010, as it suffers from delays to its A380 superjumbo and dollar weakness against the euro. EADS plans to announce more cost-saving measures by the end of July.
Airbus wants to increase the dollar content of its aircraft and plans to outsource over half of the aerostructure of the EUR10 billion mid-sized A350.
Asked how quickly governments would decide on a package of financial support for Airbus, Hintze said: "Quickly."
EADS's Gallois told a separate news conference at the air show on Tuesday that the high cost of oil was also weighing on the industry and hurting its airline customers.
"We have to adapt ourselves to very dear oil. We need to look at alternatives to kerosene, which is not easy because kerosene is excellent fuel."
The pressures faced by airlines will be reflected at July's biennial Farnborough Air Show, near London, which will not see the same level of business done as at the Paris Air Show in Le Bourget last year when Airbus notched up deals involving over 700 planes, Gallois said. The Farnborough and Paris shows alternate.
