AEROSPACE : U.S. Will Look Into United’s Airbus Deal

Airbus Industrie’s breakthrough order from United Airlines, which has been Boeing Co.’s largest and most loyal customer, rekindled allegations Thursday that the European consortium has an unfair trade advantage.

Rep. Rod Chandler (R-Wash.) said that he spoke late Wednesday to U.S. Trade Representative Carla Anderson Hills, who “assured me that the Administration will immediately undertake a thorough investigation of the Airbus bid.”

United said Wednesday that it had agreed to lease 50 A320 jets from Airbus Industrie and take options on 50 more in a deal worth at least $2.4 billion. Boeing had been United’s exclusive supplier of planes.

Analysts said the deal could ruffle an April 1 agreement between the United States and the European Community that would have put a 30% to 35% cap on government support to finance airplane development.

Washington has argued that the four European governments that make up the Airbus consortium have financed the company’s jets to the tune of $13.5 billion to $26 billion. The EC has responded that U.S. jet makers have benefited from similar backing through their military contracts.

“I think it’s going to raise a lot of political hackles,” said Pacific Crest Securities analyst Bill Whitlow, referring to the United deal.

A spokeswoman for the U.S. trade representative’s office said terms of the Airbus-United deal were not yet known, but if illegal subsidies were involved, “then we would take action.”

Kathleen Lydon said the action could be taken under the General Agreement on Tariffs and Trade, which prohibits state subsidies.

Boeing would not comment on whether the deal will affect the trade dispute.