UPDATED at 2332: The WTO has made a preliminary ruling against Airbus.
While Boeing and EADS Airbus have gone round and round in the fight over the future of the U.S. Air Force’s tanker fleet, a World Trade Organization decision may throw gasoline on the fire.
The WTO has found that Airbus received illegal subsidies from European governments. The WTO said in a confidential interim ruling that the preferential government loans for the A380 passenger jet constituted an illegal export subsidy, the Wall Street Journal reports.
Undersecretary of Defense Ashton Carter has stated that the KC-X refueling tanker competition, which was thrown back open again last year on the heels of what the GAO called a flawed decision to award the contract to the team of EADS and Northrop-Grumman, would be re-launched “this fall.” If sanctions are issued by the WTO against either the US or the EC, or both, it’s not clear whether there would be an immediate impact on the competition; however, a decision that imposed tariffs on aircraft and aircraft parts from EADS would significantly alter the economics of the EADS/Northrop bid.