Airbus will become a public limited company, but it could take up to six months of complex negotiations to thrash out the details. Europe's aerospace industry received a further boost when China confirmed Aero International Asia as its western partner in the consortium to build the proposed AE-100 regional jet, although the final shape of the group remains uncertain.
The Airbus supervisory board has formally resolved to convert the consortium from a GIE partnership to a limited company as soon as possible, and hopes to achieve this by 1999. The end of 1996 is the target date for producing a binding memorandum of understanding, including a firm timetable.
A new structure will help Airbus to cut costs, and the German and UK partners have made it a prerequisite to funding the proposed 550-seat A3XX. However, Airbus hopes to launch the $8 billion programme by the end of next year, two years ahead of the change in corporate status. Airbus denies this will cause a problem: 'We can stay as a GIE and still launch the A3XX.'
A major stumbling block in the Airbus restructuring negotiations will be valuing the manufacturing operations which are to be integrated into Airbus' marketing and product support activity. British Aerospace's Airbus manufacturing arm is more profitable, and hence more valuable, than those of Daimler Benz, Aérospatiale and Casa, and the UK firm may demand cash compensation or a shareholding higher than its current 20 per cent.
The Airbus partners have also signalled a common goal of 'continued integration of the European aircraft industry, civil and military,' suggesting that Airbus could ultimately take over responsibility for Aero International (Regional).
The selection of AIA, AI(R)'s Asian arm, as western partner for the AE-100 programme could yet speed up integration in Europe. Lead partner Aviation Industries of China (Avic) is keen to have both Daimler Benz and Airbus involved in the AE-100 project. In return Avic has been touted as a possible Asian partner in the A3XX, but at the moment it is concerned about the commercial risk attached to the widebody and wants to concentrate on the AE-100.
AIA joins Singapore Technologies in the Chinese-led consortium, but Beijing has ruled out working with South Korea. Neither Avic nor Singapore Technologies is prepared to say if they are still looking for other Asian partners, and specifically whether Taiwan Aerospace could join the final group. 'The three partners will have to decide,' says Avic.
Avic, AIA and Singapore Technologies have signed a letter of intent to proceed with contract negotiations with the aim of starting work later this year. Avic will be largest shareholder, followed by AIA and Singapore, but the percentage holdings are undecided.
R Whitaker/D Knibb
Source: Airline Business
