Since Airbus chief executive Louis Gallois revealed his plans to turn the company round through an "extended enterprise" model in February, speculation has been rife about which aerostructures specialists could be candidates to form partnerships with or take over Airbus sites. Industry big hitters like Alenia Aeronautica, Bombardier, GKN and Spirit AeroSystems have been mooted as possibilities, and while they are remaining tight-lipped on the possibility, or denying outright their interest, the tension is mounting as the identity of Airbus's saviours could have a profound effect on the shape of the industry as a whole.
Just as Boeing's shift towards greater levels of outsourcing for the 787 programme had a significant effect on the US manufacturer's supply chain, Airbus' next moves could radically alter the shape of the worldwide aerostructures industry. "It will accelerate consolidation of the aerostructures business. Another 'super tier 1' company could be created out of the process," says Richard Apps, director of consultancy Counterpoint Market Intelligence.
After the A380 debacle, and as the weak dollar continues to squeeze all European manufacturers, Airbus needs to form partnerships and agreements with companies capable of investing the cash Airbus needs to make the transition from metals-based to composite technology.
This is why many analysts believe private equity investors will be involved.
"I'm convinced private equity will play a large role," says Richard Aboulafia, vice-president analysis at the Teal Group. Apps agrees: "The more the single-aisle replacement is delayed, the more attractive the sites will be to financial buyers looking for a good assured business, and cash flow."
But private equity alone is unlikely to be the solution, Aboulafia argues. A better answer could be a combination of industrial expertise. GKN, for example, could boost its aerostructures market share, while a private equity partner would benefit from its aerospace expertise.
Salvation in the form of private equity could be a bitter pill to swallow for EADS's home nations. Aboulafia points to the irony of "private financing saving the day for a cherished national champion after government institutions failed to do anything useful".
Speaking at the Power8 briefing earlier this year Gallois jokingly ruled out Iran as a potential investor, but insisted that apart from that, "there are no restrictions on the buyer nationality-wise". The candidates would simply have to prove they are "reliable, competent and financially strong enough to commit for the long term". But this assurance is not borne out by the industry's view of what Airbus is asking for. One analyst says: "There is quite a lot of political pressure for the partners or buyers to be in the same country as the site in question to maintain the national balances." In the UK, GKN would fit the bill for Filton, while in France deals with Latécoère or Zodiac could ensure that the company keeps its precious balance of national representation. There are fewer choices for Airbus's German sites, but Diehl is one possibility. But will EADS and Airbus be prepared to consider a "long-shot" possibility that many believe represents a plausible alternative to any of these: a "deus ex machina" in the form of Middle Eastern cash?
Aboulafia argues that Dubai Aerospace Enterprise (DAE) or another Middle Eastern investor could tick both the aerospace and private equity boxes. "It is still unclear whether DAE wants to be a traditional aerospace undertaking or private equity with another flavour," Aboulafia says. Either way investing in Airbus would make sense. "DAE wants companies with an established management team that can take the business forward. It's a long shot, but they are serious buyers," agrees another analyst.
Airbus's management team appears to be picking up the pace, with more than 10 candidates now being considered as potential buyers or partners, and a shortlist established for composite site partnerships. This progress will come not a moment too soon for the company: Gallois himself has made it clear that Airbus must act quickly to ensure that Power8 takes effect.
Source: Flight International
