UK Makes Financing Offer For Airbus A350

The British government has made an offer of financing to help develop Airbus's new A350 jet, Business Secretary Peter Mandelson said on Tuesday.

Asked if the British government would contribute launch investment for the new aircraft, Mandelson told a parliamentary committee: "We've made an offer. We are negotiating with EADS, Airbus, and I think the offer we have made is proportionate to the work we can expect being undertaken in this country."

He gave no further details.

The A350 project will cost around EUR11 billion euros (USD$15.4 billion).

Government ministers from several of the European nations that produce Airbus jets said last month they had agreed in principle to provide financing for the new A350 XWB model and expected to make a final decision by the end of June.

Germany would provide EUR1.1 billion, and France would contribute EUR1.4 billion, German and French officials said.

French daily La Tribune reported this week that Britain was taking a different approach to other nations on financing the A350, preferring a loan over a reimbursable advance.

Without citing a source, the newspaper said Britain was probably prepared to pay some EUR500 million, but only in the form of a loan that would be less risky financially.

The fourth partner, Spain, is on track to advance some EUR300 million, according to La Tribune.

The outcome will be closely watched by the United States, which has already said plans to award government loans to develop the A350 were illegal.