EADS Chief Executive Louis Gallois said he was "enormously frustrated" about another delay by the World Trade Organisation in ruling on the European Union's case against the United States over alleged illegal subsidies to the company's arch-rival, Boeing Co.
"I think it's not a fair situation," Gallois told reporters ahead of the Farnborough air show, noting that a preliminary ruling from the WTO on the EU case had been postponed three times now, and the delay could affect an aerial refuelling plane competition in the United States valued at up to $50 billion.
EADS and Boeing have been battling for a contract to build 179 refuelling planes to begin replacing the ageing US fleet of Boeing-built KC-135 tankers, which are nearly 50 years old on average.
The competition is a key part of EADS' drive to expand its foothold in the United States, which accounts for half the world's defence spending. News of the delay in the WTO panel decision on the EU countersuit came shortly after the WTO released a final ruling in the US case, which said EU export subsidies to Airbus had hurt Boeing and must be scrapped.. The European Union is widely expected to appeal the WTO panel ruling.
EADS had hoped the decision on the EU case would take the sting out of Boeing allegations that the A330 being offered to the Air Force was only made possible by illegal subsidies.
A preliminary ruling in the EU countersuit had been expected on Friday, but has now been put off until September.
Pentagon officials have said they will not consider the WTO ruling at all in the tanker competition, which has angered some US lawmakers supporting the Boeing competition.
EADS still felt that it had a fair chance to win the US tanker competition, Gallois said, noting that the US government was treating the European company fairly and EADS remained convinced it was offering a better plane. The 8,800-page EADS bid was submitted to the Air Force last Thursday, Gallois said. A third competitor, US Aerospace Inc, submitted a last-minute bid together with Antonov, the state-owned Ukrainian plane builder.
Gallois said the tanker competition was clearly "a big deal" for EADS and a victory would make the European company, with big factories in France, Germany, Spain and Britain, "a citizen of the US" in terms of manufacturing aircraft.
But he said EADS planned to expand its US presence whether it won the tanker deal or not, given the huge size of the US defence market. EADS is also keen to build a new plant in the dollar zone to hedge against currency fluctuations, but Gallois welcomed the euro's move to what he called "a more reasonable rate."
"We know we have to adjust the company to a weak dollar so if the dollar is stronger, it's upside for us," he said. "We don't think that the euro is weak at 1.20 (dollars)."
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