Airbus Parent to Press on With A350 Development

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

European Aeronautic Defence and Space Co. (search) 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.

Airbus has so far announced just 10 non-binding orders for the A350, while Boeing 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 kinds of aircraft subsidies including the refundable 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 government loans for development of the plane in a letter to the European Commissionon Tuesday, an EU official said.

But the official, who spoke on condition of anonymity, 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 A350 development costs with loans from Airbus' four government backers: France, Germany, Britain and Spain.