Airbus CEO Fabrice Bregier launched a fierce attack against the tax breaks Boeing gets from Washington State and is encouraging European governments to react fast.

The day before the Berlin Air Show (ILA) opens, Bregier complained about the $8.7 billion in support Boeing negotiated for its latest wide-body program. 

“I have a problem and that’s the conditions under which the 777X has been launched,” Bregier told reporters on Monday. He pointed out that the tax breaks in his view are higher than the total development costs of the program. “But there are rules in this business and tax breaks are illegal.”

The so-called Airbus ministers are scheduled to meet at the show on Tuesday to discuss the state of the aerospace industry in general and of Airbus in particular. They will also meet with Bregier for an update on the situation of Europe’s largest aircraft manufacturer.

The Airbus CEO made clear that he expects a European reaction, but he does not see the merits of another dispute in the World Trade Organization. “That will take ten years and by that time the 777X will have long entered service.” 

Instead he –- half jokingly -– proposed that Europe has to come up with a similar system of tax incentives around the main Airbus sites in Toulouse, Hamburg or Filton to replicate what he believes has been done in the U.S. 

“We can’t face competitors that are heavily subsidized,” Bregier pointed out. “It is just not acceptable.”

The Airbus CEO also conceded that the 777X will likely force Airbus to invest in upgrades for the A380. “We will face the 777X challenge after 2020. The A380 will have to evolve as well as technologies evolve,” he said without specifying what upgrades exactly he has in mind. 

Emirates, the A380’s most important customer, has been demanding a re-engining program for the aircraft for some time, but Airbus has not yet committed to such a project. Airbus itself has been pointing at the option of configuring the main deck with an 11-abreast economy cabin. That would add another 30-40 seats.

“They (Boeing) will become a competitor to the A380,” Bregier admitted. Stretching the 777, thus allowing for more passenger seats, was “good industrial strategy” in his opinion. But he remains confident the A380 has a place in the industry: “If the aircraft was obsolete, Emirates would not have ordered another 50.”

Airbus seems to be moving nearer to a firm launch decision for the proposed A330neo -– the re-engined version of the A330. “We are studying it. I’m more optimistic than in January when I discarded the idea,” Bregier said. 

At the same time he cautioned that “it is not as straightforward as it looks.” He wants “solid industrial studies” to be completed before committing to the project. 

Bregier estimated Airbus would have to invest in excess of $1 billion if it made the choice. He stressed that Airbus started studying the A320neo in 2009 and took more than a year to firmly commit to a launch.

In the A350 program, “we are globally in line with our plans,” he said. The first aircraft will be delivered to Qatar Airways at the end of the year, and the fifth test aircraft is expected to join the fleet in June. The first four test aircraft have reached a combined 1,716 test hours so far. 

But “it (the A350 program) is still difficult and will probably remain difficult for a couple of years,” Bregier said, while pointing at the planned production ramp-up that will follow entry into service.

The A350 will also pay a visit to ILA, with one of the test aircraft on static display until Tuesday afternoon.