Board approval of Airbus A350XWB launch delayed as EADS shareholder funding concerns dominate

Flight International Online ^ | 24 November 2006 | Staff

[lowbuck]

Shareholder concerns over the funding of the Airbus A350XWB programme has meant Airbus parent EADS has reportedly cancelled a board meeting scheduled for today.

The meeting, which was scheduled to take place in Toulouse to decide on the industrial launch of the A350XWB, was cancelled at the last minute yesterday evening, reports French business daily Les Echos.

An employee of EADS shareholder Lagardere confirms the meeting has been cancelled, but was unable to immediately give further details. DaimlerChrysler declined to comment, while EADS could not immediately be reached.

Citing industry sources, the report claims the reason for the cancellation is a lack of agreement on the €9-10 billion ($12-13 billion) needed to fund the project among EADS shareholders DaimlerChrysler, Lagardere and the French State.

This is in part due to France’s reluctance to provide the project with repayable finance, which could further aggravate the ongoing US dispute over launch aid. France and Germany are also awaiting guarantees on Airbus’ turnaround plan, says the report.

Possible solutions include the introduction of new Airbus shareholders, joint ventures with industry partners, turning to the financial markets or a combination of these measures, adds Les Echos.

[lowbuck]

"France and Germany are also awaiting guarantees on Airbus’ turnaround plan"

Right, so when do the job cuts begin. What, no job cuts.

Oh, so I guess that means no "launch aid" NOT.

The only thing worse than watching this excuse for an aerospace company try to compete with the free market is being one of the taxpayers who get to fund their great plans.

[seppel]

The planes are technically excellent. And Boeing lives off the US Defence contracts, which is also a form of subsidisation.

[razorback-bert]

which could further aggravate the ongoing US dispute over launch aid

I guess I haven't been paying enought attention, what do we (the US) have to do with the aid for Airbus?

[taxed2death]

"The planes are technically excellent."

Is that why they had to change the approved flight parameters to stop the rudders from falling off?

[bill1952]

both of your statements are incorrect. you have to know it.

[Paddlefish]

Well, if your technical expertise is as good as your spelling, I'm never getting on any of those planes. Spellchecker is our friend.

[MARKUSPRIME]

Boeing>Airbust. Socialism dose'nt work. Eurabia incoming!

[Leisler]

Airbus/EADS started with, and is still joined at the hips with most of the major European defense companies. I don't think the US Defense Department cares one whit about Boeings civilian side and doesn't want to pick up a nickle of costs/overhead from some profit making people hauling sled. Generals who are military program mangers careers are on the line and would be more likely to tell Boeing off. If anything the US Defense Dept/Government would be more inclined to dump military costs onto the civilian side.

About half the value in aircraft are engines, electronics and such. Most come from the US or England.

Boeing was conservative in using composites for passenger aircraft. I feel they were waiting until military use and Airbus use provided enough historical, engineering and customer acceptance. With the 787, Boeing is full in.

Economic/finance at Airbus isn't the problem, but the symptoms of the problems. That is a heavily politicized economic company in a time sensitive and technically and manufacturing complex business. The Airbus system all works well with politicians, unions, citizens and of course Airbus. It is just a little trouble with the last one in on the deal, the customer. Someone has to pick up the costs/inefficiencies of this system. Taxpayer, Airbus or Customer. I'm betting on the Taxpayer. What's a more Euros out of every European's paycheck?

[antiRepublicrat]

I guess I haven't been paying enought attention, what do we (the US) have to do with the aid for Airbus?

They're unfair subsidies that let Airbus sell at a lower cost than Boeing. Right now, Airbus gets below-market interest loans for 1/3 of development, and only has to pay it back if they make enough of a profit. It looks like even France is worried about pushing the subsidies too far.

[Zakeet]

This is not a good sign for Airbus.

Most board meetings come off rain or shine. Contentious agenda items are usually tabled for "further study" while back room deals are struck.

Corporations have to appear united in order to maintain shareholder, customer and employee confidence. At the present time, nobody needs a bigger image boost than Airbus. And nobody is more aware of the need to maintain a proper image than the Europeans.

[antiRepublicrat]

And Boeing lives off the US Defence contracts, which is also a form of subsidisation.

But the finances are separate. It would be a real jail-time criminal act for Boeing to pay for a commercial airliner using funds from the defense contracts. Boeing's commercial airliners actually have to pay for themselves.

Besides, EADS also has billions in defense contracts, including its military transport/tanker business and about a half stake in both Dassault and Eurofighter.

[4rcane]

The planes are technically excellent. And Boeing lives off the US Defence contracts, which is also a form of subsidisation.

thats like saying Boeing is subsidies by their customers. You're twisting the definition of subsides. By your definition anything a government buys from a company is subsidies

[muffaletaman]

Boeing Commercial Aviation earned $2.1B on revenues of $20.9B in the first 9 months of 2006.

Boeing Integrated Defense Systems earned $2.0B on revenues of $22.8B in the first 9 months of 2006.

ALL of these earnings were based on items they made a delivered.

Looks like a good balance between defense and commercial business, and with earnings at a lower % rate in defense, it begs the question that this defense work is a subsidy - which normally should be taken to mean "free money" just for being there and needing / wanting it.

[magellan]

My take here.

[rrrod]

May I suggest a way to save Airbust? Perhaps the euros could sell all their children to the mussies and donate the money to the socialist state...whatchathink?