Conflicting signals cloud the future for Airbus A380

Δημοσιεύθηκε: 4 Φεβρουαρίου 2015 - 12:51

When the maker of Airbus passenger aircraft called itself the European Aeronautic Defence and Space Company, some investors needed a deep breath to say its name - and to control their despair at the group's peculiar corporate culture. A poisonous atmosphere of political intrigue percolated through the upper levels of management, fed by rivalries between the French and German governments.

EADS wisely changed its name 13 months ago to Airbus, after its best-known products. What goes on at the top of the company has gradually changed for the better, too, thanks to the calming influence of Thomas Enders, chief executive since June 2012, and his predecessor, Louis Gallois. Investors and customers have been less worried about management infighting since several European governments signed a pact in 2012 that curtailed their habit of poking their noses into Airbus's affairs. Yet a certain apprehensiveness, even dissatisfaction, affects the way Airbus is viewed from outside - and an extraordinary communications mishap just before Christmas illustrates why.

The culprit, if that is the right word, was Harald Wilhelm, Airbus's chief financial officer, who is well-liked in the company and by the investor community. When he spoke to analysts in London about Airbus's A380 airliner, the world's largest commercial aircraft, he could hardly have anticipated the uproar his remarks unleashed.

It is worth examining Mr Wilhelm's words in detail - but, first, some background. The A380 cost more than €10bn and took 10 years to develop. It has struggled to fulfil the high hopes Airbus placed in it for flourishing sales and profits. Investors, employees, parts manufacturers and, especially, the airlines that have bought or may want to buy the jet are certain to prick up their ears at the slightest hint that Airbus is reassessing such an expensive project.

Mr Wilhelm said the A380 project would break even up to 2018, "if we would do something on the product, or even if we would discontinue the product". It was not the most grammatically perfect English sentence, but the meaning seemed pretty clear: Airbus's options for the A380 included carrying on with it, giving it a new engine or some other refit, or one day not making it any more.

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>Mr Wilhelm's remarks were not solely responsible for the ensuing 10 per cent fall in Airbus's share price. More important was a sort of profit warning that emerged, unintentionally, from the company's presentation to the London analysts. Yet Mr Wilhelm's suggestion that Airbus might kill off the A380 caused consternation among his colleagues. Among the airline executives whose companies use the aircraft - above all Tim Clark of Emirates Airline, the biggest A380 customer - their reactions ranged from amazement to anger. Since then, Airbus has bent over backwards to reassure the world that no nasty surprises lie ahead. Fabrice Bregier, CEO of Airbus's commercial aircraft business, says the A380's best days are yet to come and any chatter about stopping production is "crazy". The implication is that Mr Wilhelm was talking through his hat.

But was he? As far as I can tell, he has not been disciplined or sidelined for what he said. He still sits on Airbus's executive committee. Everyone knows he is an experienced businessman, not prone to making untruthful or raving statements. Perhaps all he did was to give a flavour of the high-level discussions about the A380 that have undoubtedly taken place. What is more, the company's most recent official statement on the A380 is not quite a ringing endorsement. "The entire Airbus top management continues to believe strongly in the market prospects for the A380, but any investment requires a sound business case, which we will continue to study," it says.

Making the A380 a success is Mr Bregier's responsibility, so naturally he will defend the project with passion. But others at Airbus may feel that the aircraft is not attracting enough orders. The collapse of Skymark, Japan's third-biggest airline, which was unable to honour a $2.3bn order for six A380s placed in 2011, was a setback. Re-equipping the A380 with a new engine would be very costly. It might squeeze investments in Airbus's lines of smaller, more profitable aircraft. Poor Mr Wilhelm may have got his lines wrong, but Airbus would be remiss if it was not taking a good hard look at the A380's future.

tony.barber@ft.com

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