Airbus

2007 Schools Wikipedia Selection. Related subjects: Air & Sea transport

Airbus S.A.S.
Type	Subsidiary
Founded	1970 (Airbus Industrie) 2001 (Airbus S.A.S.)
Headquarters	Toulouse, France
Key people	Louis Gallois, CEO Hans Peter Ring, CFO John Leahy, Sales Director Fabrice Bregier, COO
Industry	Aerospace
Products	Commercial airliners ( list)
Revenue	€23,500 million ( 2005)
Employees	55,000-57,000
Parent	EADS
Website	www.airbus.com

Airbus S.A.S. is the aircraft manufacturing subsidiary of EADS N.V., a pan-European aerospace concern. Based at Toulouse, France with significant operations in other European states, Airbus produces around half of the world's jet airliners, with most of the rest built by rival Boeing Commercial Airplanes, though the precise share varies on an annual basis.

Overview

Airbus was incorporated in 2001 under French law as a simplified joint stock company or S.A.S. (Société par Actions Simplifiée). Airbus was formerly known as Airbus Industrie. The name is pronounced /ˈɛəbʌs/ in British English, /ɛʁbys/ in French, and /ˈɛːɐbʊs/ in German.

Airbus was jointly held by EADS (80%) and BAE Systems (20%), Europe's two largest defence contractors. BAE Systems announced its intention to sell its 20% share of Airbus in April 2006 and exercised its put option in June 2006 to force EADS to buy the stake. The put option appointed investment bank Rothschild to establish an independent valuation. Rothschild's valuation, reported in 2006, was £1.9 billion (€2.75 billion), well below the expectations of BAE and EADS. Unhappy with the valuation, BAE appointed independent auditors to investigate the value of its 20% share. On 6 September 2006 the BAE board announced it would recommend to shareholders to sell its share for €2.75bn (£1.87bn or $3.53bn).

Airbus employs around 57,000 people at sixteen sites in four European countries: Germany, France, the United Kingdom, and Spain. Final assembly production occurs at Toulouse (France) and Hamburg (Germany). Airbus also has three subsidiaries in the USA, Japan and China.

History

Airbus Industrie began as a consortium of European aviation firms to compete with American companies such as Boeing, McDonnell Douglas, and Lockheed. In the 1960s European aircraft manufacturers competed with each other as much as the American giants. In the mid-1960s tentative negotiations commenced regarding a European collaborative approach.

In September 1967 the German, French and British governments signed a Memorandum of understanding. In the months following this agreement both the French and British governments expressed doubts about the aircraft. Another problem was the requirement for a new engine (to be developed by Rolls-Royce, the RB207). In December 1968 the French and British partner companies, Sud Aviation and Hawker Siddeley proposed a revised configuration, the 250 seat Airbus A250. Renamed the A300B the aircraft would not require new engines, reducing development costs.

In 1969 the British government shocked its partners by withdrawing from the project. Given the participation by Hawker Siddeley up to that point, France and Germany were reluctant to take over their wing design. Thus the British company was allowed to continue as a major subcontractor. In 1978 Britain rejoined the consortium when British Aerospace (the merged Hawker Siddeley and BAC) purchased again a 20% share of the company.

Formation of Airbus

Airbus Industrie was formally set up in 1970 following an agreement between Sud-Aviation (France) and Deutsche Airbus—itself a German aerospace consortium consisting of Bölkow, Dornier, Flugzeug-Union Süd, HFB, Messerschmitt, TG Siebelwerke, and VFW. The grouping was joined by CASA of Spain in 1971. Each company would deliver its sections as fully equipped, ready to fly items. The name "Airbus" was taken from a non-proprietary term used by the airline industry in the 1960s to refer to a commercial aircraft of a certain size and range, for this term was acceptable to the French linguistically.

In 1972 the A300 made its maiden flight and the first production model, the A300B2 entered service in 1974. Initially the success of the consortium was poor but by 1979 there were 81 aircraft in service. It was the launch of the A320 in 1981 that guaranteed Airbus as a major player in the aircraft market - the aircraft had over 400 orders before it first flew, compared to 15 for the A300 in 1972.

It was a fairly loose alliance but that changed shortly after major defence mergers in 2000. DaimlerChrysler Aerospace (successor to Deutsche Airbus), Aérospatiale-Matra (successor to Sud-Aviation) and CASA merged to form EADS. In 2001 BAE Systems (formerly British Aerospace) and EADS formed the Airbus Integrated Company to coincide with the development of the new Airbus A380 which will seat 845 passengers and be the world's largest commercial passenger jet when it enters service in late 2007 according to the revised schedule announced in October of 2006.

BAE sale and A380 controversy

On 6 April 2006 BBC News reported that BAE Systems was selling again its share, then "conservatively valued" at €3.5 billion ( US$$4.17 bn). The move was seen by many analysts as a move to make partnerships with U.S. firms more feasible, in both financial and political terms. BAE originally sought to agree a price with EADS through an informal process. However due to the slow pace of negotiations and disagreements over price, BAE exercised its put option which saw investment bank Rothschild appointed to give an independent valuation.

In June 2006, Airbus became embroiled in a significant international controversy over its announcement of a further delay in the delivery of its A380. In the wake of the announcement, the value of associated stock plunged by up to a quarter in a matter of days, although it soon recovered somewhat. Allegations of insider trading on the part of Noël Forgeard, CEO of EADS, its majority corporate parent, promptly followed. The loss of associated value caused great concern on the part of BAE, The Independent describing a "furious row" between BAE and EADS, with BAE believing the announcement was designed to depress the value of its share. A French shareholder group filed a class action lawsuit against EADS in a Dutch court for failing to inform investors of the financial implications of the A380 delays while airlines to which deliveries were promised are expected to demand compensation. As a result, EADS chief Noël Forgeard and Airbus CEO Gustav Humbert announced their resignations on 2 July 2006. Forgeard's severance package is expected to include three years of salary plus the 2005 bonus; a total of at least €6 million, possibly topping €7 million.

On 2 July 2006 Rothschild valued BAE's stake at £1.9 billion (€2.75 billion); well below the expectation of BAE, analysts and even EADS. On 5 July 2006 BAE appointed independent auditors to study why the value of its share of Airbus had fallen from the original estimates to the Rothschild valuation. They pushed back any potential sale until September at the earliest. On 6 September 2006 BAE agreed to sell its stake in Airbus to EADS for £1.87 billion (€2.75 billion, $3.53 billion), pending BAE shareholder approval. On 4 October shareholders voted in favour of the sale.

On 9 October 2006 Christian Streiff, Humbert's successor, resigned due to differences with parent company EADS over the amount of independence he would be granted in implementing his reorganization plan for Airbus. He will be succeeded by EADS co-CEO Louis Gallois. This brings Airbus under more direct control of its parent company.

2007 restructuring

On 28 February 2007 CEO Louis Gallois announced the company's restructuring plans. Entitled Power⁸, the plan would see 10,000 jobs cut over four years; 4,300 in France, 3,700 in Germany, 1,600 in the UK and 400 in Spain. 5,000 of the 10,000 would be at sub contractors. Plants at Saint Nazaire, Varel and Laupheim face sell off or closure, while Meaulte, Nordenham and Filton are "open to investors". The announcements have resulted in Airbus unions in France to strike, with German Airbus workers possibly following .

Civilian products

The Airbus product line started with the A300, the world's first twin-aisle, twin-engined aircraft. A shorter, re-winged, re-engined variant of the A300 is known as the A310. Building on its success, Airbus launched the A320 with its innovative fly-by-wire control system. The A320 has been, and continues to be, a great commercial success. The A318 and A319 are shorter derivatives with some of the latter under construction for the corporate biz-jet market ( Airbus Corporate Jet). A stretched version is known as the A321 and is proving competitive with later models of the Boeing 737.

The longer range products, the twin-jet A330 and the four-engine A340, have efficient wings, enhanced by winglets. The Airbus A340-500 has an operating range of 16 700 kilometres (9000 nautical miles), the second longest range of any commercial jet after the Boeing 777-200LR (range of 17 446 km or 9420 nautical miles). The company is particularly proud of its use of fly-by-wire technologies and the common cockpit and systems in use throughout the aircraft family, which make it much easier to train crew.

Airbus is studying a replacement for the A320 series, tentatively dubbed NSR, for "New Short-Range aircraft."

In March 2006 Airbus announced the closing of the A300/A310 production line, ending over 30 years of production. The last delivery will take place in 2nd quarter 2007. Airbus intends to relocate Toulouse A320 final assembly activity to Hamburg, and A350/A380 production in the opposite direction as part of its Power8 organization plan begun under ex-CEO Christian Streiff.

Until its retirement in 2003, Airbus supplied replacement parts and service for the Concorde.

Product list and details (date information from Airbus)

Aircraft	Description	Seats	Max	Launch date	1st flight	1st delivery	Production to cease
A300	2 engine, twin aisle	228-254	361	May 1969	28 October 1972	May 1974	July 2007
A310	2 engine, twin aisle, modified A300	187	279	July 1978	3 April 1982	Dec 1985	July 2007
A318	2 engine, single aisle, shortened 6.17 m from A320	107	117	Apr 1999	15 January 2002	Oct 2003
A319	2 engine, single aisle, shortened 3.77 m from A320	124	156	June 1993	25 August 1995	Apr 1996
A320	2 engine, single aisle	150	180	Mar 1984	22 February 1987	Mar 1988
A321	2 engine, single aisle, lengthened 6.94 m from A320	185	220	Nov 1989	11 March 1993	Jan 1994
A330	2 engine, twin aisle.	253-295	406-440	June 1987	2 November 1992	Dec 1993
A340	4 engine, twin aisle	239-380	420-440	June 1987	25 October 1991	Jan 1993
A350	2 engine, twin aisle	270-350		Dec 2006	2011	mid 2013
A380	4 engine, double deck, quad aisle	555	853	2002	27 April 2005	Oct 2007

Military products

In January 1999 Airbus established a separate company, Airbus Military S.A.S., to undertake development and production of a turboprop powered tactical transport aircraft (the Airbus Military A400M.) The A400M is being developed by several NATO members, Belgium, France, Germany, Luxembourg, Spain, Turkey, and the UK, as an alternative to the C-130 Hercules. Expansion in the military aircraft market will reduce, but not negate, Airbus' exposure to the effects of cyclical downturns in civil aviation.

• A400M
• A310 MRTT (Multi Role Tanker Transport)
• A330 MRTT

Competition with Boeing

Airbus is in tight competition with Boeing every year for aircraft orders. Though both manufacturers have a broad product range in various segments from single-aisle to wide-body, both manufacturers' offerings do not always compete head-to-head. Instead they respond with models a bit smaller or a bit bigger than the other in order to plug any holes in demand and achieve a better edge. The A380, for example, is designed to be a bit bigger than the 747. The A350XWB competes with the high end of the 787 and the low end of the 777. The A320 is bigger than the 737-700 but smaller than the 737-800. The A321 is bigger than the 737-900 but smaller than the previous 757-200. Airlines see this as a benefit since they get a more complete product range from 100 seats to 500 seats than if both companies offered identical aircraft.

In recent years the Boeing 777 has outsold its Airbus counterparts, which include the A340 family as well as the A330-300. The smaller A330-200 competes with the 767, outselling its Boeing counterpart in recent years. The A380 is anticipated to further reduce sales of the Boeing 747, gaining Airbus a share of the market in very large aircraft, though frequent delays in in the A380 program have caused several customers to consider the refreshed 747-8. Airbus has also proposed the A350XWB to compete with the fast-selling Boeing 787, after being under great pressure from airlines to produce a competing model.

There are around 4,463 Airbus aircraft in service, with Airbus managing to win over 50 per cent of aircraft orders in recent years. Airbus products are still outnumbered 6 to 1 by in-service Boeings (there are over 5,000 Boeing 737s alone in service). This however is indicative of historical success - Airbus made a late entry into the modern jet airliner market (1972 vs. 1958 for Boeing).

Airbus won a greater share of orders in 2003, 2004. It also delivered more aircraft in 2003, 2004, 2005 & 2006.

In 2005, Airbus made a claim to victory again with 1111 (1055 net), compared to 1029 (net of 1002) for Boeing However, Boeing won 55% of 2005 orders by value, due to that firm winning several important widebody sales at the expense of Airbus.

In 2006 Boeing won more orders by both measures.

Orders

	2006	2005	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995	1994	1993	1992	1991	1990	1989
Airbus	824	1111	370	284	300	375	520	476	556	460	326	106	125	38	136	101	404	421
Boeing	1058	1028	277	249	251	314	588	355	606	543	708	441	125	236	266	273	533	716

Deliveries

	2006	2005	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995	1994	1993	1992	1991	1990	1989
Airbus	434	378	320	305	303	325	311	294	229	182	126	124	123	138	157	163	95	105
Boeing	398	290	285	281	381	527	491	620	563	375	271	256	312	409	572	606	527	402

Subsidies

Boeing has continually protested over "launch aid" and other forms of government aid to Airbus, while Airbus has argued that Boeing receives illegal subsidies through military and research contracts and tax breaks.

In July 2004 Harry Stonecipher (then-Boeing CEO) accused Airbus of abusing a 1992 bilateral EU-US agreement providing for disciplines for large civil aircraft support from governments. Airbus is given reimbursable launch investment (RLI, called "launch aid" by the US) from European governments with the money being paid back with interest, plus indefinite royalties, but only if the aircraft is a commercial success. Airbus contends that this system is fully compliant with the 1992 agreement and WTO rules. The agreement allows up to 33 per cent of the programme cost to be met through government loans which are to be fully repaid within 17 years with interest and royalties. These loans are held at a minimum interest rate equal to the cost of government borrowing plus 0.25%, which would be below market rates available to Airbus without government support. Airbus claims that since the signature of the EU-U.S. Agreement in 1992, it has repaid European governments more than U.S.$6.7 billion and that this is 40% more than it has received..

Airbus argues that the pork barrel military contracts awarded to Boeing (the second largest U.S. defence contractor) are in effect a form of subsidy (see the Boeing KC-767 military contracting controversy). The significant U.S. government support of technology development via NASA also provides significant support to Boeing, as does the large tax breaks offered to Boeing which some claim are in violation of the 1992 agreement and WTO rules. In its recent products such as the 787, Boeing has also been offered substantial support from local and state governments. However it has been argued that in U.S. government support of technology development, anyone can benefit from the results; even Airbus can benefit from them.

In January 2005 the European Union and United States trade representatives, Peter Mandelson and Robert Zoellick (since replaced by Rob Portman) respectively, agreed to talks aimed at resolving the increasing tensions. These talks were not successful with the dispute becoming more acrimonious rather than approaching a settlement.

World Trade Organization litigation

On 31 May 2005 the United States filed a case against the European Union for providing allegedly illegal subsidies to Airbus. Twenty-four hours later the European Union filed a complaint against the United States protesting support for Boeing.

Portman (from the USA) and Mandelson (from the EU) issued a joint statement stating: "We remain united in our determination that this dispute shall not affect our cooperation on wider bilateral and multilateral trade issues. We have worked together well so far, and intend to continue to do so."

Tensions increased by the support for the Airbus A380 have erupted into a potential trade war due to the upcoming launch of the Airbus A350. Airbus would ideally like the A350 programme to be launched with the help of state loans covering a third of the development costs although it has stated it will launch without these loans if required. The A350 will compete with Boeing's most successful project in recent years, the 787 Dreamliner.

EU trade officials are questioning the funding provided by NASA, the Department of Defense (in particular in the form of R&D contracts that benefited Boeing) as well as funding from US states (in particular the State of Washington, the State of Kansas and the State of Illinois) for the launch of Boeing aircraft, in particular the 787.

International manufacturing presence

The three final assembly lines of Airbus are in Toulouse (France) (two assembly lines) and Hamburg (Germany) (one assembly line). A fourth final assembly line, for the Airbus A400M, is under construction in Seville (Spain). It is estimated that this new assembly line will be operational by October 2006.

Airbus, however, has a number of other plants in different European locations, reflecting its foundation as a consortium. An original solution to the problem of moving aircraft parts between the different factories and the assembly plants is the use of " Beluga" specially enlarged jets, capable of carrying entire sections of fuselage of Airbus aircraft. This solution has also been investigated by Boeing, who retrofitted 3 of their 747 aircraft to transport the components of the 787. An exception to this scheme is the A380, whose fuselage and wings are too large for sections to be carried by the Beluga. Large A380 parts are brought by ship to Bordeaux, and then transported to the Toulouse assembly plant by a specially enlarged road.

North America is an important region to Airbus in terms of both aircraft sales and suppliers. 2,000 of the total of approximately 5,300 Airbus jetliners sold by Airbus around the world, representing every aircraft in its product line from the 107-seat A318 to the 565-passenger A380, are ordered by North American customers. According to Airbus, US contractors supporting an estimated 120,000 jobs earned estimated $5.5 billion (2003) worth of business. For example, one version of the A380 has 51% American content in terms of work share value.

EADS Airbus will be opening an assembly plant in Tianjin, China for its A320 series airliners, to be operational in 2009. AVIC I and AVIC II will be EADS' local partners for the site, to which subassemblies will be sent from plants around the world.

Workforce by countries

Country	Airbus direct employees
France	19,358
Germany	18,423
United Kingdom	8,688
Spain	2,726
United States	405+
People's Republic of China	100+
Total	49,700+

(Data as of December 31, 2003)

Workforce by sites

Airbus site ¹	Country	Workforce
Toulouse ( Saint-Martin-du-Touch, Colomiers, Blagnac)	France	14,133
Hamburg ( Finkenwerder, Stade, Buxtehude)	Germany	11,185
Bristol ( Filton), England	UK	4,379
Broughton, Flintshire, Wales	UK	4,309
Bremen	Germany	3,051
Madrid ( Getafe, Illescas)	Spain	2,243
Saint-Nazaire	France	2,227
Nordenham	Germany	2,106
Nantes	France	1,869
Varel	Germany	1,172
Albert ( Méaulte)	France	1,129
Laupheim	Germany	1,100
Cadiz ( Puerto Real)	Spain	483
Washington, D.C. ( Herndon, Ashburn)	USA	165+
Wichita	USA	200+
Beijing	PRC	100+
Tianjin	PRC	TBD
Miami ( Miami Springs)	USA	100
Total		49,700+

(Data as of December 31, 2003)

¹ Name of the urban/metropolitan area appears first, then in parenthesis are the exact locations of the plants

Airbus Aircraft Numbering System

The Airbus numbering system starts with the main aircraft model number (Ammm) followed by a dash and three digits (-sev) following the pattern Ammm-sev. The model number takes the form of the letter "A" followed by three digits (m), e.g. A320. The series number is a single digit (s). Two more digits after the series number represent the engine (e) and a version number (v). To use an A320-200 with IAE V2500-A1 engines as an example, the code is A320-2ev for the model and series number. Adding the engine manufacturer (for codes, see below), this makes the code now A320-23v. The version is 1, taking the code to A320-231.

An additional letter is sometimes used. These include, 'C' for a combi version (passenger/freighter), 'F' for a freighter model, 'R' for the long range model, and 'X' for the enhanced model.

Engine codes

Code	Manufacturing Company
0	General Electric (GE)
1	CFM International (GE/SNECMA)
2	Pratt & Whitney (P&W)
3	International Aero Engines (R-R, P&W, Kawasaki, Mitsubishi, and Ishikawajima-Harima)
4	Rolls-Royce (R-R)
6	Engine Alliance (GE and P&W)