Thursday, November 23, 2006

Horrible Airbus Facts

The "Top Table" shreds another $20bn

The Indie has a useful summary of where we are on the Euromoneypit Airbus A380:

  • Original development budget $10bn: current estimate $14bn
  • Additional costs from delays- $6bn
  • Original breakeven sales target- 300 planes; new breakeven- 420; current order book- 149
  • Cancellations- FedEx has already cancelled its 10 planes, at least one other cancellation is imminent
  • CEOs- Airbus now on its third CEO since the summer: Noel Forgeard was forced out by a strong whiff of insider share dealing; Christian Streiff was forced out after just three months when his emergency restructuring plan was rejected by politicos; new man Louis Gallois is a French civil servant!
  • Parting shot- "It is Airbus as a whole which failed, the management on several levels and with several passports who failed.... Airbus is not yet an integrated company" (Streiff, who also said Airbus are at least ten years behind Boeing)

Meanwhile, despite BAE's sale of its stake, British taxpayers remain firmly on the hook (see this blog). We have put in £780m*, mainly in the form of so-called "launch aid" (theoretically repayable if the wretched thing ever makes a profit... don't hold your breath). And when the wings assembly plant at Broughton and other facilities at Filton are eventually closed down, we'll doubtless have to pick up the tab- remember the MG Rover closure cost us £250m, so with twice as many workers involved in Airbus, the bill this time will be c£500m.

*Footnote: the Indie quotes a UK taxpayer contribution of £530m. But that is just for the aircraft itself (mainly for the wings, that are made here). There is a further £250m for the engine development at Rolls Royce (see HoC answer here)

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