32,400 jobs at risk over Airbus subsidy

Airbus has warned that 32,400 British jobs are at stake if the Government rejects its application for up to £400m for a new jet.

Airbus has warned that 32,400 British jobs are at stake if the Government rejects its application for up to £400m for a new jet.

The European aircraft manufacturer wants the money to develop carbon fibre wings for its mid-range A350 at Broughton, north Wales.

The company believes that this will generate 32,400 jobs across the entire supply chain and it will help to establish Britain as a leader in carbon-fibre technology.

But Iain Gray, the general manager of Airbus UK, said: "If [the Government] doesn't take the opportunity now, then we will not be able to implement the carbon fibre technology. We have now reached the critical decision point. The Government must pull through because there is a big application for carbon fibre technology in the UK. This is about changing the manufacturing base in the UK."

Whitehall sources said that the Department for Trade and Industry (DTI) is keen to offer Airbus the so-called launch aid, which is repayable with interest. Ministers had hoped to make an announcement at next month's Paris Air Show. But it is understood that this has been delayed because of the transatlantic row over aviation subsidies.

The Americans have warned that if Airbus receives any subsidy for its A350 then it will launch legal action through the World Trade Organisation. The European Commission has countered by pointing out that Boeing has received billions of dollars in tax breaks from Washington state.

There are fears that if the DTI announces an aid package for the A350, this will trigger a full-blown European-US trade war.

Securing the aid will be the most pressing job for the incoming chief executive. It is reported that Airbus's chief operating officer, Gustav Humbert, will this week be promoted to the position.