Back to the drawing board

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Back to the drawing board
by Ross Tieman IN TOULOUSE
The Business
09 Jul 2006


EXECUTIVESOF EUROPE’S AIRCRAFT manufacturer Airbus were engaged this weekend in another crisis. They had hoped to unveil the design of their new A370 aircraft this week on the eve of the Farnborough Air Show. The “launch” of the new plane, which is even more critical to the company’s future than its troubled A380 super-jumbo, had been pencilled in for 14 July until British partner BAE Systems announced it was triggering a full audit of the Toulousebased European planemaker.



On Friday, the launch of the mid-sized jet was suddenly suspended to allow new chairman Christian Streiff to “review” the troubled project, so Airbus claimed.



BAE’s move came after an independent investment bank, NM Rothschild, valued BAE’s 20% stake in Airbus at just 1.9bn (€2.75bn, $3.50bn), half what BAE chief executive Mike Turner expected two months ago when he invoked his option to sell its stake to EADS, the parent company of Airbus.



BAE’s indecision about whether to sell its Airbus stake now at this price has major implications for financing the A370 development. The audit announcement has caused consternation at Airbus’s Toulouse headquarters where executives have been fire-fighting since Airbus’s 13 June announcement that its super-jumbo A380 had hit technical problems resulting in late delivery to customers... read more...