Airbus in the news

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Airbus agrees Chinese plane plant

England's football team jetted off to the World Cup aboard an A320

European aerospace firm Airbus has agreed to build its A320 passenger plane in the Chinese city of Tianjin.

Airbus is looking to increase its share of the fast-growing domestic Chinese aircraft market.

Airbus wants the plant operational in 2008, and aims to produce four of the single-aisle A320s per month from 2011.

Building a plant in China may allow Airbus to gain an advantage over its biggest rival and local market leader, US plane firm Boeing, analysts said.

Expansion plans

Andrew Miller, chief executive of the Centre for Asia Pacific Aviation, explained that "the growth in the Chinese market for aviation has caused a big increase in the number of orders for narrow-bodied jet aircraft". "So to be the first to manufacture the aircraft close to the country may give them a lead in selling it in the local market," he continued.

Airbus earlier said that it wants to boost Chinese sales to $120m per year (£95m; 65m euros) by 2010, taking advantage of an expected increase in demand for slimmer planes that serve domestic routes in this fast-growing Asian economy.

The company, which has a small Chinese engineering operation and already buys parts from local suppliers, said it chose the north-eastern city of Tianjin because it was close to a seaport and because of its labour and industrial capabilities.

Airbus assembles planes in Toulouse, France and Hamburg, Germany, with other production facilities in Europe, including those run by BAE Systems in the UK.

BAE, which owns 20% of the company, has recently announced that it is selling its stake.

Airbus's Chinese operation may create as many as 600 jobs, analysts said.

 

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European aerospace group EADS faces a "major crisis" following its disclosure of delays to the A380 aircraft which sent its stock plunging on Wednesday, French shareholder and co-chairman Arnaud Lagardere said on Thursday...

 

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Trading probes after Airbus delays




Friday, June 16, 2006 Posted: 1559 GMT (2359 HKT)

Noel Forgeard says EADS had come "very suddenly and recently" to the conclusion delays were inevitable.​

PARIS, France (Reuters) -- The French boss of Airbus parent EADS came under new fire on Friday as French and German regulators announced share-trading probes just two days after delays to the plane maker's A380 flagship melted its stock.

Noel Forgeard, co-chief executive of Europe's aerospace giant, already faces an investor storm over his decision to sell EADS shares for a 2.5 million euro ($3.2 million) profit in March before a sale of stock by core industrial shareholders and worsening technical problems on the A380. Forgeard denied having any advance warning on either issue before selling stock, but acknowledged receiving his first glimpse of the problems inside A380 plants as early as April.

"The problems of delays were put on the table during April and at the end of May many people still thought it was possible to resolve them," Forgeard said on Europe 1 radio. "The detailed work reached its conclusions on June 13 and we published them on the same day," he said.
He ruled out resigning and said he had nothing to fear from any insider trading investigation.

On Wednesday, he told analysts EADS had come "very suddenly and recently" to the conclusion delays were now inevitable. Investors stripped a quarter of the value off EADS, Europe's biggest aerospace group which owns 80 percent of Airbus, on Wednesday after the plane maker said wiring problems had pushed back deliveries of its A380 super jumbo by another six months. It was the second such delay in a year and came alongside a 2 billion-euro profit warning spread over four years as Airbus said it would take until 2010 to recover.

French and German authorities both announced probes into EADS stock trading on Friday. French regulator AMF said its own investigation had started some weeks ago. EADS has launched its own investigation into the delays, which followed Airbus assurances in May that the 12 billion-euro program to build the world's largest airliner was on track.
Share deals

The worst crisis to hit Europe's aerospace giant since its inception in 2000 has been inflamed by questions over who knew what when and growing political unease over the mess at Airbus.

French President Jacques Chirac said EADS should fix its technical problems, but added he had confidence in its management. Forgeard is a former Chirac aide. German Economy Minister Michael Glos urged EADS to act quickly. Forgeard said he was among six senior EADS executives who had exercised options or sold stock up to March 17. He said it was three days later on March 20 that he had learned that core shareholders Lagardere and DaimlerChrysler had decided to reduce their stakes, and in April that he first heard of A380 wiring snags.

Regulatory filings show that Forgeard made 2.5 million euros from the sale of 162,000 shares from 2002-03 stock option plans on March 15. But on March 9 he also bought 131,000 shares by exercising previous 2000 and 2001 stock option plans.

Small shareholder group France Petits Porteurs called on EADS to return any executive share profits and said its leaders should either be sacked for not knowing what was happening inside the factories or jailed for insider trading. Insider trading carries a maximum prison sentence in France of two years and a fine of at least 1.5 million euros, stretching up to 10 times the illegal profits, said Jerome Herbert, a securities lawyer at Winston & Strawn in Paris.

Forgeard said Airbus would recover from the production problems, which involve the A380's 500 km of wiring. He also said Airbus was on track to reveal a final design for its mooted A350 mid-sized aircraft next month to redress a gap in sales with resurgent U.S. rival Boeing.

Aviation analysts say it is this jet -- aimed at a market of thousands of potential sales in coming decades rather than the hundreds seen for the A380 -- that will be decisive for Airbus.

EADS owns 80 percent of Airbus which is also its main source of profit. Britain's BAE Systems owns the other 20 percent and has said it plans to sell its stake to EADS.

 

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The joint boss of aerospace group EADS, Tom Enders, acknowledges the current difficulties at the firm constitute a crisis...

 

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Crisis talks over Airbus troubles

Mr Forgeard says problems with the A380 should be put in perspective

The management of embattled aerospace group EADS has met for the first time since the Airbus-owner announced a severe profit warning.

The firm's shares plunged 26% when it reported further delays in the delivery of its Airbus A380 superjumbo.

EADS also faces allegations of insider dealing, after co-chief Noel Forgeard sold shares in the firm in March. Opposition politicians in France have called for Mr Forgeard's position at the head of the firm to be reviewed.

Executives present

Mr Forgeard insists he sold the shares before he knew of delays to the plane and did nothing wrong.

Internal divisions are causing difficulties for the Franco-German group with reports that changes in senior management could be imminent.

I sold the shares in a completely transparent manner
Noel Forgeard, EADS co-chief executive


The company confirmed a management meeting took place on Monday but downplayed its significance, saying it was not a formal board meeting.

According to unconfirmed industry sources, the firms four most senior figures - co-chairmen Arnaud Lagardere and Manfred Bishchoff, Mr Forgeard and fellow chief executive Tom Enders - were all present.

Mr Enders has acknowledged that the current situation constituted a crisis for EADS which had extended beyond Airbus.

Political pressure

The A380s has been delayed because of problems with its wiring and airlines are now calling for compensation over the six-month extra wait.

The delays are expected to reduce the firm's annual earnings by 500m euros ($630m; £340m) between 2007 and 2010.
But in an interview in French business newspaper La Tribune, Mr Forgeard said the problems "must be put in the proper perspective".

They did not "raise questions about the quality of the design of the airplane itself", he said.

The question I am asking is whether today Mr Forgeard can stay at the head of the EADS group

Francois Hollande, French Socialist leader

Mr Forgeard said he was "shocked" by the claims he had profited from insider knowledge when he, three of his children and two other executives sold shares before the A380 announcement was made.

"I sold the shares in a completely transparent manner," Mr Forgeard said. "The only question is whether I had privileged information at that time. The answer is categorically no."

Pressure is growing on the French government - which owns 15% of EADS - to intervene in the situation.

"The question I am asking the prime minister is whether today Mr Forgeard can stay at the head of the EADS group?" Francois Hollande, the Socialist Party leader, said.

 

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Prime Minister Dominique de Villepin sparked uproar in the French parliament on Tuesday when he accused the Socialist leader of cowardice in a debate over an industrial crisis at Europe's leading aerospace company...

 

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Airbus raises price of A380 plane

French ministers are under pressure to force changes at EADS

Airbus has increased the sale price of its A380 superjumbo, whose problems have triggered a management crisis at parent company EADS.
Airbus said the price of all its models - including the A380 - rose two weeks ago in a standard annual increase. The disclosure of a six-month delay to delivery of the A380 has thrown its Franco-German parent firm into turmoil.

The French government, a major investor in EADS, is under pressure to force management changes at the firm.

'Normal move'

French finance minister Thierry Breton has met with senior managers and is expected to put forward measures to rebuild confidence in the company within days.

According to the Financial Times Deutschland, the list price of the A380 - which will become world's largest airliner - rose by 4.7% to between 235.4m euros ($295.6m; £161.9m) and 251.6m euros ($316m; £173.1m) earlier this month.

The situation must be improved

Michele Alliot-Marie, French defence minister

An Airbus spokesman confirmed that the price of all its models had risen but declined to comment on individual figures.

The increases were in no way connected to the costly delays to the A380, he stressed. "Like every industry, we raise our list prices each year," he said.

Forced to scale back its A380 delivery targets for the next three years, Airbus is set to lose 2bn euros in earnings.
It is also likely to face compensation claims from airlines having to wait longer for the new aircraft.

Under-fire

Senior executives have been severely criticised for their handling of the A380's problems and the way they communicated the news to investors.

Noel Forgeard, one of EADS' two co-chief executives, is under added pressure after selling share options in March weeks before the production problems first came to light.

He has denied any wrongdoing but financial regulators are investigating movement in EADS shares in recent months. Amid calls for the French government to increase its role in EADS, defence minister Michele Alliot-Marie said investors needed to address the firm's "structural problems".

The firm's dual management structure - consisting of two chief executives and two chairmen representing German and French interests - has been criticised as unwieldy. "The situation must be improved," she said. "It is incontestable."

 

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From BBC News

EADS sues over leaked documents

EADS problems were triggered by wiring problems in the A380

Embattled aerospace group EADS has filed a legal complaint over leaked internal documents hinting at problems at the Airbus owner.

It follows reports in French newspaper Le Monde, which claimed EADS executives were aware of Airbus delays a month before they were officially announced. The report cited minutes of an EADS audit committee meeting held in May.

As well as legal action - including a claim for damages - an internal probe into the leak has begun, EADS said. "The legal (grounds) of the complaint are theft, harbouring and unauthorised disclosure of strictly internal and confidential draft documentation, which is company property," the firm said.

"This draft document appears to be used deliberately with the intention of pointing to alleged Franco-German tensions, which are not existing, and which the draft document itself does not even evidence in any way, shape or form."

Crisis

The reports added to pressure at the firm, triggered by news that deliveries of its flagship Airbus A380 superjumbo will be delayed. EADS saw 26% of its share price wiped out following the announcement on 14 June. Since then, its French co-chief executive Noel Forgeard has been embroiled in allegations of an insider dealing scandal.

On Wednesday, Mr Forgeard was called to the French parliament to explain the crisis, and told MPs he would not quit his post. The meeting came a day after French regulators raided the Paris headquarters of EADS as part of the share dealing probe.

The investigation, centred on Mr Forgeard, is examining whether EADS executives knew about the A380 delays before they sold shares in the group shares in mid-March.
Mr Forgeard denies any wrongdoing.

Changes ahead

However, the problems at the firm have sparked claims of divisions within the group - with its key German shareholder, DaimlerChrysler, said to be demanding that Mr Forgeard quit. The carmaker, which owns 30% of EADS, is said to be unhappy with the management structure at the Franco-German firm, which has two chairmen and two chief executives - one each from the French and German sides.

However, any shake-up would leave the firm's French investors with a stark choice. On the one hand they would have to sacrifice Mr Forgeard and replace him with another French co-chief - possibly leaving the French boss's chair empty while a decision is made - or do away with the dual management structure altogether.

 

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EADS and Airbus bosses both quit

Mr Forgeard faced intense pressure to stand down

The embattled co-chief executive of Airbus parent company EADS, Noel Forgeard, has resigned.

The announcement comes after intense pressure on Mr Forgeard to quit in the wake of an insider trading scandal. Mr Forgeard, who denies wrongdoing, was accused of deliberately selling shares in EADS before the firm announced a delay to the Airbus A380 superjumbo. It was also announced that Airbus chief Gustav Humbert has resigned over the A380 delays.

"The recently announced delay on the A380 production and delivery programme has been a major disappointment for our customers, our shareholders and our employees," said Mr Humbert. "As president and chief executive of Airbus, I must take responsibility for this setback and feel the right course of action is to offer my resignation to our shareholders."
Mr Humbert, a German, is being succeeded by Christian Streiff, a former executive of French building materials group Saint-Gobain.

Angry shareholders

Mr Forgeard is being replaced by fellow Frenchman Louis Gallois, head of French state railway company SNCF.

Mr Humbert has resigned to take responsibility for the A380 delays

Co-chief executive of Airbus since last year, Mr Forgeard has continually denied any wrongdoing over his selling of EADS shares. He said he sold the shares in question in March of this year, and that he did not know of delays in the production of the A380 until April. When the delays were announced last month, Airbus's share price slumped 26%. Mr Forgeard's protestations of innocence were not enough to calm shareholder anger, and he has now paid the price.

Yet he initially refused to stand down, telling a French parliamentary committee last week that such a move was "out of the question".

Possible compensation

Following the scandal, there were also calls for EADS to end its dual management structure.

The A380 project has not gone as smoothly as hoped

A Franco-German firm, it has two chief executives and two chairmen, one from each country. It looks as if this structure will continue. The delays to the A380 have been caused by wiring problems. EADS now says that only nine of the planes, instead of the previously expected 20 to 25 will be delivered next year. As a result, Airbus is to hold talks on compensation with those airlines who have already ordered the plane.

 

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From BBC News

EADS team puts reputation on line

LOUIS GALLOIS

Profile of new joint EADS boss

The new boss of EADS has warned that the company's reputation is "at stake" after the recent problems afflicting its Airbus business.

Louis Gallois, who replaced Noel Forgeard as co-chief executive of the Airbus owner, said rebuilding confidence in the firm was paramount.

Concerns over Airbus's market worth has led shares in EADS and BAE Systems - the other Airbus shareholder - to fall. Shares in EADS closed down less than 1% but BAE shares were down more than 3%. BAE Systems wants to sell its 20% stake to EADS but will now get far less for it than was hoped as Airbus' market value has declined. The stake was independently valued at a lower-than-expected 2.75bn euros (£1.9bn), reflecting production problems with the A380 plane.

Stabilization

EADS's new management team said its priority was to restore faith in the A380 after a string of problems led to the departure of Mr Forgeard and Airbus boss Gustav Humbert.

We will have to regain the trust of our customers, investors and - not least - our employees

Louis Gallois, Tom Enders - co-chief executives, EADS


"We need to stabilize the A380 and we need to move ahead with our product strategy, our resources, our processes and the industrial set-up," stressed Mr Gallois and his counterpart Tom Enders. The two promised further changes in the way Airbus and EADS were managed after fierce criticism of the way the companies have handled the problems affecting the A380. "Due to the management difficulties of recent weeks and the A380 crisis, EADS' reputation is at stake. "We will have to regain the trust of our customers, investors and - not least - our employees in the management, strategy and products of EADS."

Falling value

EADS' problems have been exacerbated by a disappointing valuation of Airbus's worth carried out by investment bank NM Rothschild. BAE had hoped to get twice the amount for its stake before recent disclosures of a seven-month delay to the A380. It will now advise shareholders whether to accept a sale of the stake at the new valuation price after weighing up its options. If it goes ahead with the sale - and it remains possible that it will decide to retain the holding - it expects the proceeds to total £1.14bn.

Airbus has reassured its British staff about their pensions

Since BAE revealed its intention to sell its stake in April, Airbus has encountered a stream of problems. Technical difficulties with the A380 - the world's largest commercial aircraft - mean that fewer planes will be ready for delivery in each of the next three years than was originally planned. The delays are likely to cost Airbus 2bn euros in lost earnings up to 2010, while airlines are likely to seek compensation for late delivery. One aviation analyst said he expected BAE to proceed with the sale of its stake despite concern over its price.

"BAE has a very strong balance sheet but obviously it is a blow if one to one and a half billion pounds has been knocked off the value of something you were expecting," said Howard Wheeldon.

Dual resignations

Mr Gallois is a former head of French state railway company SNCF, while the new boss of Airbus is Christian Streiff, a former executive of French building materials group Saint-Gobain.

Mr Humbert had been under pressure to resign after being accused of failing to keep shareholders informed about the problems to the A380. Mr Forgeard was under particular scrutiny after he sold shares in EADS just weeks before the news of the delays first came to light. He has denied claims of insider trading although market regulators are investigating movement in EADS shares in recent months.

Despite the changes, many experts are worried that EADS is persisting with its dual management structure - made up of two chairmen and chief executives from Germany and France. EADS' shareholders include the French government and German-US carmaker DaimlerChrysler.

 

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Airbus loses aircraft lead

From news.com.au:

AIRBUS is set to confirm that after five years, it has lost the lead in aircraft orders to its US rival Boeing, The Times newspaper reports today.

The grim news emerges as the embattled European aircraft manufacturer collates its half-year order book at its headquarters in Toulouse, southwest France, the London paper says.

"A yawning gap between the two companies will become apparent," it says in its lead business story. Airbus has "definitive orders" for 145 to 150 aircraft so far this year, against 445 for Boeing, it says.

 

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From CNN International

BAE orders new Airbus audit
Wednesday, July 5, 2006 Posted: 1404 GMT (2204 HKT)

Airbus A380 during tests at London's Heathrow airport.​

LONDON, England (Reuters) -- Britain's BAE Systems ordered an audit of Airbus on Wednesday, pushing back its possible sale of a 20-percent stake in the European planemaker into September at the earliest.

BAE was set to sell the stake to 80-percent owner EADS using a put option but a lower-than-expected valuation of 2.75 billion euros ($3.52 billion) on the stake by investment bank Rothschild, brought in to arbitrate between the two sides, threatens to put the sale on hold.

"BAE Systems expects that the audit will assist its board in assessing whether or not to recommend that its shareholders vote in favor of the proposed disposal," BAE said in a statement. "This underlines we are committed to do what is best for our shareholders," a spokeswoman said.
BAE said the audit would be carried out by an independent party and not its own auditor, KPMG, and was in accordance with its agreements with EADS and Airbus.

It declined to name the auditor and said its results would not be completed before the end of August. BAE said on Tuesday it expected quick resolution of the possible sale, plans for which were announced in April. Analysts expect BAE, if it sells, to use the proceeds for fresh acquisitions in the defense sector, with the U.S. market high on the agenda.

The valuation by Rothschild announced on Sunday was well below analysts' forecasts of as much as 5 billion euros, and also below the 3.5 billion euro fair value price the stake carries on EADS's consolidated balance sheet. EADS, Europe's biggest aerospace firm, declined to comment.

BAE holds a put option, giving it the right to sell its stake to EADS.
The Franco-German-Spanish firm has the right of first refusal and has said it is willing to buy, meaning BAE cannot sell the stake to someone else.
If BAE holds on, it cannot exercise the put option again until next May at the earliest, which is when an annual window next opens.

 

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From CNN Money.com:

EADS exec: Airbus underestimated Boeing

Tom Enders, co-head of company, says troubled A350 has to be superior to 787.

July 12 2006: 6:51 AM EDT

STUTTGART, Germany (Reuters) -- The co-head of European aerospace firm EADS admitted its Airbus unit had clearly underestimated arch rival Boeing and said the priority was to fix problems at Airbus, which is trailing its U.S. competitor in aircraft sales.

Airbus's mid-sized A350 model, which is being redesigned to compete with Boeing's bigger-selling 787, had to be a superior aircraft, Tom Enders told a briefing restricted to Stuttgart-based journalists late Tuesday in comments embargoed for publication Wednesday. He added that Airbus was not under time pressure and said the timing of a decision on the design of the A350 was not bound by next week's Farnborough Air Show in Britain, a showcase for the industry.

Former joint EADS Chief Executive Noel Forgeard had said at the Berlin air show in May that decisions would be made on the A350 by Farnborough. But Forgeard resigned at the start of this month, having lost a bitter struggle to keep his job after Airbus announced further six-month delays to deliveries of the A380 superjumbo in June, news that wiped a quarter off EADS shares.
EADS shares were up 1.1 percent in Paris on Wednesday morning to €21.48 ($27.37) , broadly in line with France's blue-chip CAC 40 index.

Airbus said Monday that aircraft sales plunged by more than half in the first six months of this year to 117 mainly single-aisle planes, down from 276 in the year-earlier period. That compared with 480 orders for Boeing (Charts), boosted by the success of its 787, up from 441 a year earlier.

But Enders said: "The problems at Airbus do not mean we are a restructuring case." He said delays to the A380 had not yet prompted any airline customers to cancel orders for the aircraft, the world's largest passenger plane. An audit was in place to provide an independent assessment of the schedule of the A380 and he was not in a position to rule out further delays until that was completed, he added.

Enders also said Airbus was on track to deliver more than 400 aircraft this year. Airbus chief salesman John Leahy said last week it would deliver 430 planes in 2006.

 

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From BBC News:


Airbus ups the pressure on Boeing

Mr Streiff expects the A350 to take to the skies in 2012


Airbus has stepped up its battle with US rival Boeing with the launch of a modified version of its A350.

The long-haul, mid-sized A350 XWB plane will compete directly with the forthcoming 787 Dreamliner being developed by Boeing. But Airbus chief Christian Streiff admitted the firm was in a "serious crisis" with its customers as result of delivery delays for its A380 plane. Meanwhile, Boeing also admitted it was having problems with its Dreamliner.

UK concerns

Airbus chief Christian Streiff said the XWB - which stands for extra wide body - was an "entirely new design", using all the latest technology. Three models of the plane were unveiled - a 270-seater, 314-seater and one with a capacity of 350 passengers.

He added that he wanted to wait 100 days before greenlightling the project for its industrial launch, but the plane was set to enter service in 2012 as expected. Designers have also changed the plane's wing design - a development that has sparked concerns for workers in Wales and Bristol who make them.

Weekend reports suggested a rift was developing between Airbus parent EADS and the UK government after UK aerospace giant BAE Systems decided to sell its 20% stake in EADS.

The Airbus A350 has been up against Boeing's 787 Dreamliner

Newspaper reports said EADS was demanding that the UK government should allow it to compete against BAE for a greater share of UK defence and aerospace contracts - or face job cuts in the UK. Airbus bosses refused to be drawn on the future of UK engineers working for Airbus saying that the UK was currently a centre of excellence for wing making, but no site had a "God-given right" to be given contracts.

UK Trade Secretary Alistair Darling is set to meet top managers from the firm at Farnborough, with reports suggesting he hopes to secure the jobs of the 16,000 UK workers who make wings and other parts for the plane.

A380 backing

As well as unveiling the new A350 design, Airbus also reaffirmed its faith in its 555-seat A380 superjumbo, after recent costly problems with the aircraft, saying it was "guardedly" optimistic of signing up new orders.

Mr Streiff also said the group was also "learning to be humble and learning to change its bad habits" as he called for a complete review of the Toulouse-based firm and a shake up of its working practices. The previous Airbus chief executive, Gustav Humbert, resigned earlier in July over delays to the A380 as a result of wiring problems.

Airbus was not the only aerospace giant facing up to problems with production as US rival Boeing admitted its flagship 787 Dreamliner had been hit by glitches. "We're a little over where we want to be at this time on weight, but ahead of where we were on previous programmes, so we're really focused on weight-efficient structure right now," Boeing chief Alan Mulally said.

"Some partners are a little behind on the schedule but we're working with them on recovery plans to catch up," he added. But Mr Mulally insisted the hitches would not delay the plane's expected launch next year ahead of it entering service in 2008.

 

[Kiwi Flyer]

Flight Global

SQ orders 20 A350XWB (+20 options), takes up option on further 9 A380 (still 6 more options unused) and leases 19 A333 in the interim.

 

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Flight Global

SQ orders 20 A350XWB (+20 options), takes up option on further 9 A380 (still 6 more options unused) and leases 19 A333 in the interim.

So, SQ can't be too upset with the A380 delays.

 

[Kiwi Flyer]

They are upset. More likely Airbus had to compensate SQ for the late delivery and they agreed mutually beneficial arrangements - extra a/c heavily discounted.