ILA 2008: India targeted for EADS cash

EADS CEO Louis Gallois says that his company is on the acquisition trail, particularly in the US and India, and warns that sales figures to be announced at Farnborough are likely to be poorer than last year.

Speaking at the show Gallois says that acquisitions are needed to offset the poor dollar/euro exchange rate and provide a better balance to the company.

“Ninety per-cent of our employees are in Europe and 65% of our revenue comes from Airbus,” he says. “We need to diversify and move more into defence, security and services. This won't limit our Airbus business, but these other businesses would be less cyclical and more profitable.”

EADS, which is currently battling delays to its Airbus A380, thinks that North American acquisitions could reduce its exposure to the poor exchange rate.

“We want to extend our US footprint and also sell some of the Airbus sites,” he says. By the end of April we had received 432 orders this year, but sales are difficult with the current financial crisis.”

EADS announced in in December that it would sell off manufacturing plants at Filton in the UK, Meaulte and Saint Nazaire Ville in France, and Nordenham, Varel and Augsburg in Germany.

When asked if EADS would ever build aircraft in India he replies: “Why not ? There is a shortage of skilled engineers in Europe and a surplus in India. It is not only a low-cost market, but a large one too.”

EADS is also currently chasing the Indian contract for 126 MMRCA (medium multi-role combat aircraft) and local production is part of the agreement.

He says that EADS wins equally if either the Eurofighter or the Dassault Rafale are chosen as EADS has a 46% stake in both.

Gallois also renewed his call for more European government funding to help the aerospace industry. “We cannot compete with Boeing when it receives so much state subsidy,” Gallois says.

He also adds that a top priority for EADS is what he called an “eco-efficient enterprise” to look at ways of reducing CO2 emissions, reduce air traffic and develop alternative fuels. He says a joint venture with Boeing could not be ruled out. “EADS and Boeing both have a common goal to reduce the impact of air transport,” he says. “It doesn't mean we will build aircraft together, but we could jointly-fund a university or other academic institution.”

He also says that larger aircraft like the A380 are the answer to rising oil prices. “The Airbus A-380 uses less than three litres of kerosene per passenger per 100km – it is very well adapted to high oil prices.”