HC Deb 05 November 1986 vol 103 cc949-50
9. Mr. McCrindle

asked the Secretary of State for Trade and Industry if he has yet received an application from British Aerospace for launch aid in connection with the Airbus A330/A340 project; and if he will make a statement.

Mr. Pattie

My Department received an application from British Aerospace for launch aid in respect of the proposed Airbus A330/A340 programme on 20 October. A detailed appraisal of the application has been set in hand.

Mr. McCrindle

If my hon. Friend accepts that Airbus can be truly competitive with the large American aircraft manufacturers only if it can offer airline customers a broad range of products, is he aware that several of us hope that the Government will react favourably towards the application from British Aerospace, especially as launch aid was provided for the A320?

Mr. Pattie

I note my hon. Friend's remarks. He will recall that the success rate of the A320 programme appears to be very encouraging, offering the prospect of a reasonably early repayment of that launch aid. We understand the case being made about the family of aeroplanes. At present, Airbus is engaged in a marketing operation on the A340 in order to establish the level of airline interest in that aeroplane.

Mr. Geoffrey Robinson

Can the Minister confirm that a decision on the application by British Aerospace is expected before the end of this year? Will he take that decision irrespective of any collaboration with McDonnell Douglas? Will he confirm that the British Aerospace and Airbus Europe decision stands on its own right and will be considered in that light, that the £750 million launch aid is acceptable in principle to his Department and that we can expect a decision before the end of the year?

Mr. Pattie

The hon. Gentleman would not expect me at this stage, when 1 have just told the House that the detailed appraisal has just been set in hand, to say what level of expenditure is likely to be acceptable to the Government. We have to take into account the market opportunities for one of the aeroplanes in particular.

British Aerospace seeks and expects a decision from the Government in the first quarter of next year, not before the end of this year.

When I met my ministerial colleagues during the Farnborough air show to discuss whether the talks with McDonnell Douglas should be suspended, it was agreed that Airbus had asked for that suspension and that the suspension should take place to give Airbus the opportunity to market the A340 without suggestions that it would go in with McDonnell Douglas.

I believe that there are advantages in the longer term in certain of the other programmes, such as the stretch version of the A320, where co-operation with McDonnell Douglas could be fruitful.

Mr. Stern

Has my hon. Friend seen the forecast of the expected market for aeroplanes of the size of the A340 up to and including the year 2005? Does he agree that the forecasts are extremely encouraging, and will he bear them in mind when evaluating the application for launch aid?

Mr. Pattie

Yes, I have seen the forecasts. Those are precisely the types of factors that we want to take into account to see whether those forecasts accord with the forecasts that we and others are making.