The A380 stole the show at Paris. But boardroom turmoil cast a shadow over what should have been a triumphant week for EADS
At about twenty past two every day last week business at the Paris air show came to a halt. Chalets emptied and crowds gathered to watch the world’s biggest airliner complete its seven-minute flying display over Le Bourget. The spectacle – just weeks into a punishing flight test schedule – typified French élan, delighted visitors and made headlines around the world. President Jacques Chirac, who two years ago at Le Bourget witnessed the swansong of France’s previous aviation icon Concorde, could this time marvel in his country’s contribution to the future of aviation.
For Airbus and 80% shareholder EADS, Paris ought to have been a triumph. Instead, it may be a show they want to forget. Despite announcing almost $30 billion of orders and commitments last week, Airbus has headaches aplenty. The A380 is behind in its development programme (a week performing at Le Bourget cannot have helped) and deliveries have been delayed. Paris would have been an ideal platform for the industrial launch of the A350 – an arguably more important airliner than
the A380 if Airbus is to stop Boeing capturing critical mass in the midsize market. But the programme has been postponed until at least September. In the meantime, a resurgent Boeing is continuing to ramp up its orderbook, particularly with the 787.
For the first time in years, Airbus arrived at Le Bourget trailing its counterpart in terms of sales, and its usually sure-footed senior executives seemed at times caught off guard, forced to bat off uncomfortable questions about programme delays and succession plans. When Qatar Airways held a low-key press briefing to say it was in negotiations to buy 60 A350s, Airbus hurriedly convened its own conference to confirm the news: this is not the way high-profile airliner orders tend to be announced at air shows. And although Airbus is being bullish about its prospects as the subsidies dispute heads for the World Trade Organisation, the prospect of a punitive settlement is making its shareholders nervous.
At least Airbus has someone in the pilot’s seat. With EADS’s French and German shareholders still haggling over who should the run the business units under co-chief executives-designate Tom Enders and Noel Forgeard, the latter remains in charge at Toulouse. Paris should have been the chance for Enders and Forgeard to take centre stage as successors to Rainer Hertrich and Philippe Camus, whose contribution to EADS’s success saw them jointly named personalities of the year at last week’s Flight International Aerospace Industry Awards. Instead, both were doing their old jobs – in Enders’ case announcing plans to integrate his LFK missiles unit into European missile house MBDA, in which EADS has a 37% stake.
EADS’s management board impasse is becoming an industry joke. “Unlike some companies, our chief executive is here,” quipped Thales’ Denis Ranque at a pre-Paris briefing. The Franco-German giant was forced to cancel media events before and during the show because most of its top executives are treading water, waiting to take up new jobs.
Ironically, it was only a few months ago that Munich and Paris were quietly relishing the turmoil at rival Boeing, which had seen the departure in ignominy of two chief executives in quick succession and the jailing of its chief financial officer for illegally offering a job to a government employee. Now, with Boeing in the competent caretaker hands of chairman Lew Platt and acting chief executive James Bell, an ordered succession contest under way, and share price soaring, it is the European rival that is facing the negative headlines.
We have said it before, but EADS must ditch the old industrial and nationalistic baggage that was kept in check under Camus and Hertrich, but which surfaced in the power struggle for executive positions. Forgeard and his allies in the Paris government are often blamed for creating trouble in the first place – his ego driving his bid to become sole chief executive, keep his hands on Airbus and steer a merger with fellow French giant Thales. However, there is an argument that the Germans – in their desire to ensure that their industry is not swamped in a French-dominated EADS – are applying the brakes on the company becoming a genuinely pan-national enterprise.
EADS is at a crossroads and it must decide whether it wants to stay a rather awkward Franco-German-Spanish partnership or become a genuine global player, responsible to commercial shareholders and run – like Boeing – by the best person for the job.
Source: Flight International
