http://seattlepi.nwsource.com/business/188750_air01.html =20 For the most part, Boeing and Airbus are not that far apart when predicting how many jetliners the world will need during the next 20 years. Except when it comes to very big airplanes. And then there is a very big disagreement. Now, Boeing is privately saying it knows why Airbus has been forecasting that the world will want far more planes the size of the 555-passenger Airbus A380 superjumbo than the number Boeing has forecast. In a word, it has to do with the Airbus "subsidies," according to Boeing. Airbus has inflated the market forecast for its superjumbo, Boeing argues, as a clever legal tactic to skip out on paying back the nearly $4 billion in government launch aid it received to help it develop the new jet. That, anyway, is the private view from Boeing as U.S. and European trade representatives prepare to square off later this month for face-to-face talks on the issue of aircraft subsidies. Nonsense, counters Airbus, which last year delivered more jets than its U.S. rival for the first time. The government loans that Airbus received for development of its A380 under a 1992 accord will be paid back in full, with interest, and within 17 years, the European jet maker says. And Boeing will eventually have to eat -- as in crow -- its big-plane market forecast. The Airbus subsidy issue -- Airbus argues that it receives repayable government loans, not subsidies as Americans understand the word -- dominated the talk at the Farnborough Air Show outside London in July.=20 More fuel was added to this growing wildfire last month when President Bush, campaigning at Boeing plants in Washington state and in Pennsylvania, threatened to file a complaint with the World Trade Organization over the Airbus aid. Democratic presidential candidate John Kerry has weighed in, too, saying the Bush administration has not done enough to stop the subsidies. Boeing argues that the subsidies give Airbus a huge unfair advantage.=20 The loans mitigate Airbus' risk because they would not be repaid should the new aircraft program fail, according to Boeing. The U.S. aerospace giant also argues that Airbus gets much more favorable terms from European governments than if it had to go shopping at a commercial bank or lender to borrow billions to help develop a new plane. In a couple of weeks, U.S. Trade Representative Robert Zoellick is scheduled to meet with European Union officials to talk about the subsidies and the 1992 bilateral agreement that allows Airbus to receive government loans for up to a third of the total development costs of a new plane. In the case of the A380, which is set to enter service in two years, that amounted to about $3.7 billion that Airbus received from France, Germany and Britain.=20 Regardless of what happens next, Boeing knows it is too late to roll back the clock on the A380. Instead, Boeing wants to make sure that Airbus doesn't get the government support to develop a new plane, or derivative model, to counter the threat from Boeing's new 7E7, a midsize jet that will enter service in 2008. Airbus is known to be talking to engine makers and a few airlines about developing a derivative of its A330-200 to better compete against the 7E7. Airbus executives have refused to rule out seeking government launch aid under the 1992 agreement for any future plane. Boeing spent the last couple of years quietly gathering evidence about direct and indirect government aid to Airbus from whatever public records it could find in Europe -- evidence that was turned over to the U.S. government as it prepares to make the case that it is time to end the Airbus subsidies. Boeing officials familiar with the matter will speak to reporters only on a background basis, not for identification by name. They say the A380 provides a good case study. Airbus has 129 orders for its double-decker giant, and could firm up 10 or so additional orders this year. Boeing has long maintained that the market for new planes bigger than its 416-passenger 747-400 is insufficient to justify the huge development costs of an all-new jumbo. In its most recent 20-year forecast, made public at the Farnborough Air Show, Boeing predicted a worldwide demand for only about 320 passenger planes with more than 500 seats during that time. The total market for planes the size of the 747 or bigger during the next 20 years is about 900 jets, according to Boeing. That includes freighters. The Airbus 20-year forecast puts the same market at about 1,500 jets. Airbus has said it expects to win 1,000 orders for its A380. And Boeing says that claim may have more to do with the 1992 bilateral agreement than an objective market forecast.=20 The agreement spells out how aircraft development support is to be repaid. Repayments are calculated based on a "forecast of aircraft deliveries in the critical project appraisal." And the government support received, along with interest, must be repaid no more than 17 years from the time of the first repayment. But that particular "forecast of aircraft deliveries" is not public information. The 1992 agreement further says that 20 percent of the aggregate payments calculated in accordance with that 17-year time schedule are "payable on the basis of the delivery of a number of aircraft corresponding to 40 percent of forecast deliveries." It further states that 70 percent must be repaid by the time of 85 percent of the forecast deliveries. Boeing reads that to mean that Airbus does not have to repay 20 percent of the government support it got for the A380 until it delivers 40 percent of its forecast deliveries -- whatever that figure is. So the bigger the delivery forecast number, the less likely that Airbus will ever deliver 40 percent, the Boeing argument goes. In response to a question about the A380 repayment schedule, Airbus said the loan repayments are based on "conservative forecast of sales -- the confidential specifics of which are known and agreed to by both the EU and U.S. governments." This conservative number ensures that the loans will be repaid within 17 years, Airbus said. "Loan repayments are made on every delivery of an aircraft, regardless of the sales price, profitability and even before the program breaks even," Airbus said in a statement.=20 "In the case of the A380, this means that loan repayments will begin with the delivery of the very first aircraft in 2006," the statement said. A spokesman for the office of the office of U.S. trade representative was unable to verify yesterday if Airbus shared with the U.S. government that confidential A380 delivery forecast. Boeing called "curious" the fact that Airbus says it used a "conservative" market forecast but doesn't want to make that number public. By what definition is the figure considered conservative? Boeing asked. Even though Airbus maintains that it is fully complying with the 1992 agreement, Boeing says "so what" -- the subsidies are unacceptable, unfair and must stop. Boeing Chief Executive Harry Stonecipher is flying to Europe -- in advance of the EU-U.S. trade talks later this month -- to continue emphasizing that point.