EADS Vows to Press on With A350 Development

PARIS (AP) -- The parent company of Airbus vowed Wednesday to press ahead with development of the mid-sized A350 jet to compete with Boeing's 787 Dreamliner, amid a simmering trans-Atlantic trade dispute over subsidies to the two planemakers.

European Aeronautic Defence and Space Co. said its board had ''confirmed its willingness to proceed towards the full industrial launch of the program with its partner BAE Systems by the end of September.''

EADS owns 80 percent of Toulouse, France-based Airbus, and Britain's BAE Systems PLC owns the remaining 20 percent. The defense group said it had received expressions of interest by several airlines including commitments _ or non-binding orders - that will be announced ''in the near future.''

Airbus has so far announced just 10 A350 order commitments, while Boeing Co. has 266 orders and commitments for the 787. But Airbus' chief salesman, John Leahy, has said he expects to announce more than 100 further A350 orders during next week's Paris Air Show at Le Bourget, close to the French capital.

Plans for European government aid to fund development of the A350 are at the center of a trade dispute between the United States and the EU, after Washington filed a complaint at the World Trade Organization.

EADS last month confirmed its ''full support'' for the elimination of all public aid on both sides, including the loans Airbus receives from governments - provided that all federal, state and foreign subsidies to Boeing are also scrapped.

The European defense company also spelled out its conditions for giving up the development loans in a letter to the European Commission on Tuesday, said an EU official, who spoke on condition of anonymity.

But the official said that, in the absence of a comprehensive deal to cut subsidies on both sides, the EADS offer did not affect plans to fund the usual one-third of the A350's 4 billion-euro ($4.9 billion) development cost with loans from Airbus' four government backers: France, Germany, Britain and Spain.

EADS declined to comment on the letter or on the state of talks about the government support.

Washington last month rejected an EU proposal that would have included a 30 percent cut to Airbus development aid, instead filing a WTO complaint - a move that European Trade Commissioner Peter Mandelson said had actually opened the door to A350 aid.

''This will take years to resolve and in the meantime it's open to Airbus to receive any amount of launch investment from member states prepared to make that investment,'' Mandelson said at the time.