Germany plans €1-billion loan for Airbus A350

The German government has signaled a willingness to help finance production of the Airbus A350 with loans totalling more than €1 billion, Die Welt reported Sunday. Berlin hopes the funds will help secure Airbus manufacturing sites in Germany.

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“The German government is fundamentally ready to guarantee a development loan of more than €1.1 billion,” Peter Hintze, a deputy economy minister and government aviation coordinator told the paper's website.

The European plane maker’s long-haul craft is a rival model to Boeing’s 787 Dreamliner. The development of the plane is estimated to cost €10 billion and scheduled to debut in 2013. Airbus has already received some 500 orders for the A350.

“From our side, all the requirements have been met: The conditions conform to WTO rules, and the funds are available,” Hintze said, adding that the government must still clarify certain points with the plane maker. “We want a quick agreement,” he said. “The goal is to conclude discussions this spring.”

The key issue in the government’s negotiations with Airbus concerns production locations for a second Airbus project, the short- to medium-range plane A30X. The German government is asking Airbus to base more of its A30X production in Germany, particularly as work on the A350 has been largely centred in France.

“We want to be certain that the research and development work for the A30X comes to Germany,” Hintze said. “We have to set the course for that today.”

Airbus has already decided to base the final assembly of its A30X planes in Hamburg, but Germany is also eager to strengthen the city’s profile as a centre for research and development. “German suppliers will also profit from that production later on,” Hintze said.

The exact date to start production on the A30X, considered the next generation of the plane maker’s bestselling A320, has not yet been determined. Airbus still has plans to update its A320 model.

Meanwhile, Airbus is awaiting the outcome of a decision by the World Trade Organisation, which could be announced next week. The United States previously lodged a complaint with the WTO over claims that Airbus had received illegal subsidies from the European Union.