AIRBUS TO TRY RESTRUCTURING PLAN AFTER A380 CRISIS

PARIS September 29, 2006 (AFP) - The new chief executive of Airbus [Christian Streiff] was Friday outlining a vast restructuring plan for the ailing aircraft maker that could involve major job cuts and shifting more production out of Europe. ... No details have officially been released of the proposed Airbus restructuring but union sources said it was likely to include major job cuts and other efficiency measures that could affect factories in France, Germany, Spain and Britain.

... The presentation came a day after Airbus suffered another setback when European and US aviation authorities said the A380's powerful wake meant that other aircraft would have to keep a greater than usual distance between themselves and the giant plane.

... Airbus admitted last week that a third round of A380 delays was likely to be announced and sources told AFP the company would announce a halving of its expected deliveries next year.

AIRBUS CHIEF REPORTEDLY FAILS TO WIN EADS BACKING FOR OVERHAUL

PARIS September 29, 2006 (AFP) - In a brief statement the EADS board said: "Today the EADS board of directors met in Amsterdam to discuss the A380 situation, amongst other regular topics. The board of directors will continue this discussion in the near future."

A union source asking not to be named said after the talks: "They did not reach an agreement."

He suggested that there may have been disagreement on plans to revamp Airbus, currently struggling to compete with its US rival Boeing, among French and German shareholders in EADS.

M. Streiff's plan comes atop this string of dispiriting headlines.

FRENCH SHAREHOLDER GROUP SUES THE PARENT OF AIRBUS
PARIS July 10, 2006 (IHT)

FALLING AIRBUS SALES HAND BOOST TO BOEING

July 11, 2006 (AFP) - European aircraft maker Airbus has announced a sharp fall in its orders, a setback for the company in its battle with Chicago-based Boeing and a sign that the US group is in the ascendancy.

Airbus said it had booked 117 firm orders for passenger jets in the first half of 2006, fewer than half the number in the same period of 2005 and far behind Boeing.

AIRBUS PARENT CUTS [EARNINGS] OUTLOOK ON DELAYS IN A380
PARIS July 27, 2006 (IHT)

AEROFLOT TO SPLIT ORDER BETWEEN BOEING AND AIRBUS

September 20, 2006 (WaPo) - [Aeroflot Chief Executive Valery Okulov] said state-controlled Aeroflot had already closed tender talks with Boeing to buy 22 Dreamliners, while negotiations on buying the Airbus A350s would continue.

EMIRATES MAY CANCEL BIG AIRBUS ORDER

September 21, 2006 (Forbes/AP) - Emirates airlines said Thursday that its order of 45 Airbus A380 jumbo jets was "up in the air," after reports that deliveries of the plane may be delayed. Spokeswoman Valerie Tan said officials at the Dubai-based airline were discussing whether to go forward with the order.

QATAR GOES FOR BOEING AS AIRBUS FEELS PINCH

September 24, 2006 (ITP) - Under-fire aircraft manufacturer Airbus has been dealt another blow after Qatar Airways confirmed plans to take delivery of a further 20 Boeing 777s. The airline will run 40 Boeings in total, after the announcement last week of a firm order for 20 777s. The airline’s fleet was previously exclusively provided by Airbus.

AIR FRANCE DEMANDS TO BE FIRST
EUROPEAN AIRLINE TO RECEIVE AIRBUS A380s

PARIS September 25, 2006 (AFX) - Air France-KLM unit Air France has demanded to be the first European client of EADS to receive the Airbus A380 planes it ordered, ahead of Lufthansa, the daily La Tribune said, citing commercial manager Christian Boireau. ... The delivery schedule would likely result in one but not both European airlines having A380s in time to transport passenger traffic to Beijing for the 2008 Olympics.

AIRBUS TO DELAY A380 AGAIN, REDUCE COSTS, PEOPLE SAY

October 1, 2006 (Bloomberg) - Airbus, based in Toulouse, France, can probably deliver just four A380s next year, less than half the number predicted in June, because of delays in installing wiring, said the people, who asked not to be identified before an announcement.

A LITTLE BACKGROUND: Airbus was incorporated in 2001 under French law as a simplified joint stock company or S.A.S. (Société par Actions Simplifiée) and is jointly owned by EADS (80%) and BAE Systems plc (20%), Europe's two big defense contractors. BAE has since mulled, denied, and finally announced the sale of its holding, after two independent valuations could do no better than half the desired price. So BAE leaves our story.

On July 10, 2000 a merger of Aérospatiale-Matra of France, Construcciones Aeronáuticas SA of Spain, and DaimlerChrysler Aerospace AG of Germany formed a "one kitchen/big kitchen" European aerospace corporation, The European Aeronautic Defence and Space Company EADS N.V. (EADS). Although the competive dynamics of consolidation natural to these businesses brought about the merger, chauvinism and mistrust resulted in an unnatural and awkward French-German management structure. EADS has two co-CEO's, one French and one German. The board of directors also has two co-chairmen, one French and one German. This duplicative French and German management is reproduced throughout EADS and, not surprisingly, results in endless infighting. This self-inflicted inexpedience is obviously not for business reasons. It is for translating the political sway of the French and German governments.

The Spanish state has a minority holding, but nobody much bothers with Spain. Recently Russian state bank Vneshtorgbank bought a 5% stake in EADS. Everyone bothers a great deal about Russia.

The business world coldly picks winners and losers. Pave takes an interest in the misfortunes of Airbus not to celebrate its failures, but to puncture its earlier -- misplaced and bumptiously premature -- triumphalism over Boeing and American aeronautics. There are no permanent winners, no predetermined winners, no designated winners in business. The American Thinker (April 28th, 2005):

Europe’s aerospace industry has a wee bit of an inferiority complex toward the Yankees. Of course, compared to Europe’s computer industry, Europe’s software industry, and Europe’s biotechnology industry, aerospace is doing just great. In fact, Airbus has been outselling Boeing in recent years, a historic counter-reversal and a deep humiliation for the formerly Seattle-based, now Chicago-based aerospace behemoth.

Americans may have forgotten that Europe’s DeHavilland introduced the world to passenger jetliners in 1952, only to lose the lead to Boeing, but our cousins across the Atlantic have not. All the worse, in their eyes, that Boeing was paid by the Department of Defence to develop a jet tanker to use with the B-52 fleet, and turned it into the 707.

So, with the A-380 taking to the air, is Airbus all set to deliver the knockout blow to Boeing? Not this year [2005]. In fact, Boeing is roaring back to a substantial lead in aircraft orders so far.

Winners are awarded at the cash register. Money in hand. Not airy order-books chock-a-block with future non-deliveries.

The American Thinker (September 22, 2006) recently summed up the Airbus situation:

The whalejet, as [the A380] is known to some, has morphed from queen of the air into drama queen of the air. ... The A 380 has gone from a dream to a nightmare. It is a problem that is simultaneously financially important, diplomatically sensitive, and symbolically potent. Outright cancellation of the A 380 seems almost unthinkable, such would be the blow to Europeans’ self-regard. But the program is already billions of euros over budget, and the end is nowhere in sight.

Earlier posts on Airbus troubles can be found (here, here, here, and here).

PFFT (What is this?): What a mess 4¾ | Borne out triumphalism ½ | Rayonnement français 0