New A350 due in July. Probably.
Published 9:00 pm Monday, May 15, 2006
I just got off the phone with a seriously jet lagged Richard Aboulafia, who was checking in from the Berlin air show where Airbus chief Gustav Humbert today made the clearest suggestion yet that Team Toulouse is ready to scrap its A350 plan in favor of a new design. http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7B0EAE369D-748D-4749-8800-ED36A7E64444%7D&keyword=
It’s been a big day for A350 news. Stories out of Europe suggest that Airbus is getting ready to ask for higher levels of launch aid to help fund development of the new version http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2006-05-16T164131Z_01_L16201093_RTRIDST_0_TRANSPORT-EADS-UPDATE-5.XML — even though parent company EADS posted a 26-percent increase in profits during the most-recent quarter.http://www.bloomberg.com/apps/news?pid=10000085&sid=aBVBK0oAznew&refer=europe
The hint of more Airbus launch aid drew an angry response from U.S. Sen. Patty Murray (D-Boeing).
Key Quote: “That Airbus is now talking about increasing launch aid for the A350 is not surprising. Airbus has been breaking the rules for years — and their illegal tricks have cost America jobs.”
First — the new A350. Humbert told MarketWatch that Airbus is working on a new design.
Key Quote: “Humbert said the concept for an improved A350 will be presented to the ministers of the four Airbus countries France, Germany, Spain and the U.K. … at the beginning of the International Aerospace Exhibition in Farnborough, U.K. on July 17.”
It’s likely to be an extensive redesign, MarketWatch reported.
Key Quote 2: “German Deputy Economics Minister Georg Adamowitsch … said Airbus is considering the modification of the aircraft’s cabin, engine, electronics and cockpit. But he added Airbus doesn’t plan to construct a completely new A350 aircraft.”
No, apparently they’re not changing plans for tires or paint.
The A350 announcement overshadowed a strong EADS earnings report, Reuters noted. EADS shared closed down 5.6 percent on Tuesday, inspite of double-digit profit margins and rising sales.
Key Quote: “The need for extra funds — which industry reports say could double the projected research and development … cost of 4.3 billion euros — kept attention focused on political and engineering challenges facing Airbus, even as its parent company EADS … unveiled brighter-than-expected quarterly results. … ‘It is down on the lack of clear news on the A350 and the idea that they might need more money to complete the project is not a good surprise,’ said a Paris-based dealer.”
It’s the source of the extra A350 development funds that’s causing some uproar. Airbus is clearly considering seeking increased assistance from European governments.
Key Quote: “‘If there is a solution soon, then we could think about alternative financing. But in the other event, we may consider applying for government loans,’ EADS Co-Chief Executive Noel Forgeard said.”
That wouldn’t be prudent, U.S. officials replied. http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2006-05-16T203656Z_01_WAT005568_RTRUKOC_0_US-TRADE-AIRBUS-USA.xml&archived=False
Key Quote: “‘The United States has made it clear for over two years now that launch aid for the A350 is unacceptable,’ said Neena Moorjani, a spokeswoman for the U.S. Trade Representative’s office.”
Murray’s reaction was stronger. It isn’t on the Web yet, but her people e-mailed me a copy, which says in part:
“Despite Airbus’ status as the current leading manufacturer of large civil aircraft with more than 50 percent of the market share, the company continues to receive market distorting subsidies and engage in unfair trade practices which are undermining the U.S. aerospace industry and American jobs.”
