At an annual shareholders meeting the European aerospace giant EADS promised to double turnover in the upcoming years despite production delays and an insider trading investigation.
Not quite ready for takeoff
EADS, the company that makes Europe's Airbus aircraft, plans to double turnover by 2020 to around 80 billion euros ($125 billion), chief executive Louis Gallois said Monday, May 26.
Airbus, a wholly-owned subsidiary of EADS, will bring in half of the sales volume, Gallois told the company's annual general meeting in Amsterdam. While Gallois remained upbeat about long-term prospects, he said current high feul prices could lead to a drop in orders in the near future.
"In coming quarters, I expected the order flow to slow, especially because of the difficulties airlines are having because of the sharp rise in oil prices," he said.
Delays will be minimal
More delays for the A380
At Monday's shareholder meeting, Gallois was asked several times about the latest delays to its flagship A380 superjumbo project. Galloise said the deliveries would be delayed three or five months, but not more.
Gallois stressed that "ramping up (A380) production was underway and so we are not faced with the same catastrophe we faced two years ago but (the ramping-up) is not going fast enough."
Airbus confirmed earlier this month that the A380 would have to push back its delivery schedule. The program has already faced three production delays that put the jet 18 months behind schedule and forced Airbus and parent company EADS to pay an estimated 3.87 billion euros compensation to customers.
Now, Airbus says 12 of the aircraft will be delivered in 2008 instead of the 13 forecast, and 21 in 2009 instead of the 25 it had expected.
Additionally, Gallois said the first flight of the A400M military transport, also facing delays, is planned for this summer.
Vote of confidence
Gallois wants to create a better working environment
EADS President Ruediger Grube said he had faith in the company's management despite a continuing investigation into insider trading by the French AMF financial authority.
Noel Forgeard, former co-chief executive at EADS, has been called to speak with the authorities in connection with the probe, sources close to the matter told the French news agency AFP Monday. They said Forgeard, who resigned in July 2006, was to appear Wednesday.
Forgeard has denied any wrongdoing. To date, no one has been placed under formal investigation.
The AMF suspects 17 representatives of the major stakeholders, Germany's Daimler and France's Lagardere, as well as top Airbus and EADS managers, of dumping EADS shares before it became clear in mid 2006 that Airbus was facing severe delays in its A380 superjumbo program.
Franco-German tensions flare
Airbus hopes to increase sales
On Monday, the French daily Le Parisien reported tensions between the firm's French and German managers. The Chamber of Commerce and Industry of the city of Toulouse, where Airbus has its headquarters, had sent a letter to French Finance Minister Christine Lagarde complaining about the actions of German EADS executives, the paper said.
The letter, which was sent one week ago, accused German management of having "purposely wrecked" plans to sell two Airbus plants to the French aircraft supplier Latecoere. The letter accuses German managers of a "manipulation" aimed at "ruining" French interests and which will "lead to the death of thousands of jobs in France."
The Toulouse Chamber of Commerce urged the French government, which owns 15 percent of EADS, to take actions to prevent what it calls a "catastrophe."
In an interview published Friday in the daily La Depeche du Midi, Gallois, admitted that passions were running high, but he called on everyone concerned to "put an end to these sterile debates, which create a hateful climate."
However, he also said that the job-cutting foreseen for Airbus in the so-called Power 8 cost-saving program "was not progressing as quickly in Germany as in France."
This situation, Gallois warned, "must be corrected."