Airbus SE (/ˈɛərbʌs/, French: [ɛʁbys] ( listen), German: [ˈɛːɐ̯bʊs], Spanish: [ˈeirβus]) is a European multinational corporation that designs, manufactures and sells civil and military aeronautical products worldwide. In addition to its primary civil aeroplane business, the company has two divisions for other products and services: Defence and Space and Helicopters, the latter being the largest in its industry in terms of revenues and turbine helicopter deliveries.^[6]

The company's main civil aeroplane business is based in Blagnac, France, a suburb of Toulouse, with production and manufacturing facilities mainly in France, Germany, Spain, China, United Kingdom and the United States. Final assembly production is based at Toulouse, France; Hamburg, Germany; Seville, Spain; Tianjin, China, and Mobile, United States.^[7] The company produces and markets the first commercially viable digital fly-by-wire airliner, the Airbus A320,^[8][9] and the world's largest passenger airliner, the A380. The 10,000th aircraft, an A350, was delivered to Singapore Airlines on 14 October 2016 ; the global Airbus fleet having performed more than 110 million flights over 215 billion kilometres, carrying 12 billion passengers.^[10]

Today's company is the product of international consolidation in the European aerospace industry tracing back to the formation of the Airbus Industrie GIE consortium in 1970. In 2000, the European Aeronautic Defence and Space Company (EADS) NV was established. In addition to other subsidiaries pertaining to security and space activities, EADS owned 100% of the pre-existing Eurocopter SA, established in 1992, as well as 80% of Airbus Industrie GIE. In 2001, Airbus Industrie GIE was reorganised as Airbus SAS, a simplified joint-stock company. In 2006, EADS acquired BAE Systems's remaining 20% of Airbus.^[11] EADS NV was renamed Airbus Group NV and SE in 2014, and 2015, respectively.^[12][13][14] Due to the dominance of the Airbus SAS division within Airbus Group SE, these parent and subsidiary companies were merged in January 2017, keeping the name of the parent company. The company was given its present name in April 2017.^[15] (For further details, see History)

Airbus's corporate headquarters is located in Leiden, Netherlands and the main office is located in Toulouse, France.^[16] The company is led by CEO Thomas Enders and is a component of the Euro Stoxx 50 stock market index.

History

Origins

Airbus Industrie began as a consortium of European aviation firms formed to compete with American companies such as Boeing, McDonnell Douglas, and Lockheed.^[17]

While many European aircraft were innovative, even the most successful had small production runs.^[18] Factors favouring American aircraft manufacturers included: the size of the United States which made air transport popular; a 1942 Anglo-American agreement entrusting transport aircraft production to the US; and the World War II legacy of "a profitable, vigorous, powerful and structured aeronautical industry" in America.^[18]

The European industry began to accept, along with their governments, that collaboration was required to develop such an aircraft and to compete with the more powerful US manufacturers. Negotiations began over a European collaborative approach and at the 1965 Paris Air Show the major European airlines informally discussed their requirements for a new "Airbus" capable of transporting 100 or more passengers over short to medium distances at a low cost.^[19] The same year Hawker Siddeley (at the urging of the UK government) teamed with Breguet and Nord to study Airbus designs. The Hawker Siddeley/Breguet/Nord group's HBN 100 became the basis for the continuation of the project. By 1966 the partners were Sud Aviation, later Aérospatiale (France), Arbeitsgemeinschaft Airbus, later Deutsche Airbus (West Germany) and Hawker Siddeley (UK).^[19] A request for funding was made to the three governments in October 1966.^[19] On 25 July 1967, the three governments agreed to proceed with the proposal.

In the two years following this agreement, both the British and French governments expressed doubts about the project. The memorandum of understanding had stated that 75 orders must be achieved by 31 July 1968. The French government threatened to withdraw from the project due to its concern over funding all of the Airbus A300, Concorde and the Dassault Mercure concurrently, but was persuaded to maintain its support.^[22] With its own concerns at the A300B proposal in December 1968, and fearing it would not recoup its investment due to lack of sales, the British government withdrew on 10 April 1969.^[19][23] West Germany took this opportunity to increase its share of the project to 50%.^[22] Given the participation by Hawker Siddeley up to that point, France and West Germany were reluctant to take over its wing design. Thus the British company was allowed to continue as a privileged subcontractor.^[18] Hawker Siddeley invested GB£35 million in tooling and, requiring more capital, received a GB£35 million loan from the West German government.^[22]

Formation of Airbus Industrie GIE

Airbus Industrie was formally established as a Groupement d'Intérêt Économique (Economic Interest Group or GIE) on 18 December 1970.^[22] It had been formed by a government initiative between France, West Germany and the UK that originated in 1967. Its initial shareholders were the French company Aérospatiale and the West German company Deutsche Airbus, each owning a 50% share. The name "Airbus" was taken from a non-proprietary term used by the airline industry in the 1960s to refer to a commercial aircraft of a certain size and range, for this term was acceptable to the French linguistically. Aérospatiale and Deutsche Airbus each took a 36.5% share of production work, Hawker Siddeley 20% and the Dutch company Fokker-VFW 7%.^[19] Each company would deliver its sections as fully equipped, ready-to-fly items. In October 1971 the Spanish company CASA acquired a 4.2% share of Airbus Industrie, with Aérospatiale and Deutsche Airbus reducing their stakes to 47.9%.^[19] In January 1979 British Aerospace, which had absorbed Hawker Siddeley in 1977, acquired a 20% share of Airbus Industrie.^[24] The majority shareholders reduced their shares to 37.9%, while CASA retained its 4.2%.^[25]

Development of the Airbus A300

The Airbus A300 was to be the first aircraft to be developed, manufactured and marketed by Airbus. By early 1967 the "A300" label began to be applied to a proposed 320 seat, twin engined airliner.^[19] Following the 1967 tri-government agreement, Roger Béteille was appointed technical director of the A300 development project.^[26] Béteille developed a division of labour that would be the basis of Airbus' production for years to come: France would manufacture the cockpit, flight control and the lower centre section of the fuselage; Hawker Siddeley, whose Trident technology had impressed him, was to manufacture the wings;^[27] West Germany should make the forward and rear fuselage sections, as well as the upper centre section; the Dutch would make the flaps and spoilers; finally Spain (yet to become a full partner) would make the horizontal tailplane.^[26] On 26 September 1967 the West German, French and British governments signed a Memorandum of Understanding in London which allowed continued development studies. This also confirmed Sud Aviation as the "lead company", that France and the UK would each have a 37.5% work share with West Germany taking 25%, and that Rolls-Royce would manufacture the engines.^[18][26]

In the face of lukewarm support from airlines for a 300+ seat Airbus A300, the partners submitted the A250 proposal, later becoming the A300B, a 250-seat airliner powered by pre-existing engines.^[19] This dramatically reduced development costs, as the Rolls-Royce RB207 to be used in the A300 represented a large proportion of the costs. The RB207 had also suffered difficulties and delays, since Rolls-Royce was concentrating its efforts on the development of another jet engine, the RB211, for the Lockheed L-1011^[22] and Rolls-Royce entering into administration due to bankruptcy in 1971.^[28][29] The A300B was smaller but lighter and more economical than its three-engined American rivals.^[30][31]

Formation of Eurocopter SA

The Eurocopter SA was formed in 1992, through the merger of the helicopter divisions of Aérospatiale and DASA. The company's heritage traces back to Blériot and Lioré et Olivier in France and to Messerschmitt and Focke-Wulf in Germany.^[39]

Formation of the European Aeronautic Defence and Space Company NV

Background

In June 1997, British Aerospace Defence Managing Director John Weston commented "Europe... is supporting three times the number of contractors on less than half the budget of the U.S."^[40] European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.^[41]

As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace were said to be eager to create a transnational aerospace and defence company.^[42] The two companies envisaged including the French company Aérospatiale, the other major European aerospace company, but only after its privatisation.^[43] The first stage of this integration was seen as the transformation of Airbus from a consortium of British Aerospace, DASA, Aérospatiale and Construcciones Aeronáuticas SA into an integrated company; in this aim BAe and DASA were united against the various objections of Aérospatiale.^[44] As well as Airbus, British Aerospace and DASA were partners in the Panavia Tornado and Eurofighter Typhoon aircraft projects. Merger discussions began between British Aerospace and DASA in July 1998, just as French participation became more likely with the announcement that Aérospatiale was to merge with Matra and emerge with a diluted French government shareholding.^[45] A merger was agreed between British Aerospace Chairman Richard Evans and DASA CEO Jürgen Schrempp in December 1998.^[46] However, when the British General Electric Company put its defence electronics business Marconi Electronic Systems (MES) up for sale on 22 December 1998, British Aerospace abandoned the DASA merger in favour of purchasing its British rival. The merger of British Aerospace and MES to form BAE Systems was announced on 19 January 1999 and completed on 30 November.^[47][48] Evans stated in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.^[46]

Formation of EADS and expansion (1999–2008)

DASA and the Spanish aircraft company Construcciones Aeronáuticas SA agreed to merge with the signature of a memorandum of understanding on 11 June 1999.^[49] On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company.^[50] 10 July 2000 was "Day One" for the new company, which became the world's second-largest aerospace company after Boeing and the second-largest European arms manufacturer after BAE Systems.^[51]

In January 2001 Airbus Industrie was transformed from an inherently inefficient consortium structure to a formal joint stock company, with legal and tax procedures being finalised on 11 July.^[52][53] Both EADS and BAE transferred ownership of their Airbus factories to the new Airbus SAS in return for 80 % and 20 % shares in the new company respectively. In April 2001 EADS agreed to merge its missile businesses with those of BAE Systems and Alenia Marconi Systems (BAE/Finmeccanica) to form MBDA. EADS took a 37.5 % share of the new company that was formally established in December 2001 and which thus became the world's second-largest missile manufacturer.^[54]

On 16 June 2003 EADS acquired BAE's 25 % share in Astrium, the satellite and space system manufacturer, to become the sole owner. EADS paid £84 million, however due to the lossmaking status of the company BAE invested an equal amount for "restructuring".^[56] It was subsequently renamed EADS Astrium, and had the divisions Astrium Satellites, Astrium Space Transportation and Astrium Services.

In November 2003, EADS announced that it was considering working with Japanese companies, and the Japanese METI, to develop a hypersonic airliner intended to be a larger, faster, and quieter, replacement for the Concorde, which was retired in October the same year.

Despite repeated suggestions as early as 2000 that BAE Systems wished to sell its 20 % share of Airbus, the possibility was consistently denied by the company.^[57] However, on 6 April 2006 BBC News reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion.^[58] Due to the slow pace of informal negotiations, BAE exercised its put option, which saw investment bank Rothschild appointed to give an independent valuation. Six days after this process began, Airbus announced delays to the A380 with significant effects on the value of Airbus shares. On 2 June 2006 Rothschild valued BAE's share at £1.87 billion, well below BAE's, analysts' and even EADS' expectations.^[59] The BAE board recommended that the company proceed with the sale and on 4 October 2006 shareholders voted in favour; the sale was completed on 13 October making EADS the sole shareholder of Airbus.^[60]

In March 2007 EADS Defence and Security Systems division was awarded an eight-year, £200m contract to provide the IT infrastructure for the FiReControl project in the UK.^[61]

Transition from Airbus Industrie GIE to Airbus SAS

The retention of production and engineering assets by the partner companies in effect made Airbus Industrie a sales and marketing company.^[62] This arrangement led to inefficiencies due to the inherent conflicts of interest that the four partner companies faced; they were both GIE shareholders of, and subcontractors to, the consortium. The companies collaborated on development of the Airbus range, but guarded the financial details of their own production activities and sought to maximise the transfer prices of their sub-assemblies.^[53] It was becoming clear that Airbus was no longer a temporary collaboration to produce a single plane as per its original mission statement, it had become a long term brand for the development of further aircraft. By the late 1980s work had begun on a pair of new medium-sized aircraft, the biggest to be produced at this point under the Airbus name, the Airbus A330 and the Airbus A340.^[63][64] In the early 1990s the then Airbus CEO Jean Pierson argued that the GIE should be abandoned and Airbus established as a conventional company.^[65] However, the difficulties of integrating and valuing the assets of four companies, as well as legal issues, delayed the initiative. In December 1998, when it was reported that British Aerospace and DASA were close to merging,^[66] Aérospatiale paralysed negotiations on the Airbus conversion; the French company feared the combined BAe/DASA, which would own 57.9% of Airbus, would dominate the company and it insisted on a 50/50 split.^[67] However, the issue was resolved in January 1999 when BAe abandoned talks with DASA in favour of merging with Marconi Electronic Systems to become BAE Systems.^[68][69][48] Then in 2000 three of the four partner companies (DaimlerChrysler Aerospace, successor to Deutsche Airbus; Aérospatiale-Matra, successor to Sud-Aviation; and CASA) merged to form EADS, simplifying the process. EADS now owned Airbus France, Airbus Deutschland and Airbus España, and thus 80% of Airbus Industrie.^[53][70] BAE Systems and EADS transferred their production assets to the new company, Airbus SAS, in return for shareholdings in that company.^[53][71]

Development of the A380

In mid-1988 a group of Airbus engineers led by Jean Roeder began working in secret on the development of an ultra-high-capacity airliner (UHCA), both to complete its own range of products and to break the dominance that Boeing had enjoyed in this market segment since the early 1970s with its 747.^[72] The project was announced at the 1990 Farnborough Air Show, with the stated goal of 15% lower operating costs than the 747-400.^[73] Airbus organised four teams of designers, one from each of its partners (Aérospatiale, DaimlerChrysler Aerospace, British Aerospace, CASA) to propose new technologies for its future aircraft designs. In June 1994 Airbus began developing its own very large airliner, then designated as A3XX.^[33][74][75] Airbus considered several designs, including an odd side-by-side combination of two fuselages from the Airbus A340, which was Airbus's largest jet at the time.^[76] Airbus refined its design, targeting a 15% to 20% reduction in operating costs over the existing Boeing 747–400. The A3XX design converged on a double-decker layout that provided more passenger volume than a traditional single-deck design.

Five A380s were built for testing and demonstration purposes.^[77] The first A380 was unveiled at a ceremony in Toulouse on 18 January 2005, and its maiden flight took place on 27 April 2005. After successfully landing three hours and 54 minutes later, chief test pilot Jacques Rosay said flying the A380 had been "like handling a bicycle".^[78] On 1 December 2005, the A380 achieved its maximum design speed of Mach 0.96.^[77] On 10 January 2006, the A380 made its first transatlantic flight to Medellín in Colombia.^[79]

The Airbus A380 was delayed in October 2006 due to the use of incompatible software used to design the aircraft. Primarily, the Toulouse assembly plant used the latest version 5 of CATIA (made by Dassault), while the design centre at the Hamburg factory were using the older and incompatible version 4.^[80] The result was that the 530 km of cables wiring throughout the aircraft had to be completely redesigned.^[81] Although no orders had been cancelled, Airbus still had to pay millions in late-delivery penalties.^[80]

The first aircraft delivered was to Singapore Airlines on 15 October 2007 and entered service on 25 October 2007 with an inaugural flight between Singapore and Sydney.^[82][83] Two months later Singapore Airlines CEO Chew Choong Seng said that the A380 was performing better than both the airline and Airbus had anticipated, burning 20% less fuel per passenger than the airline's existing 747-400 fleet.^[84] Emirates was the second airline to take delivery of the A380 on 28 July 2008 and started flights between Dubai and New York^[85] on 1 August 2008.^[86] Qantas followed on 19 September 2008, starting flights between Melbourne and Los Angeles on 20 October 2008.^[87]

Expansion and sale of BAE stake

In 2003, Airbus and the Kaskol Group created an Airbus Engineering centre in Russia, which started with 30 engineers and since has emerged as a model of success for Airbus’ globalisation strategy. It was the first engineering facility to open in Europe outside the company’s home countries. Equipped with state-of-the-art communications equipment and linked with Airbus engineering sites in France and Germany, the facility performs extensive work in disciplines such as fuselage structure, stress, system installation and design. In 2011, the centre employs some 200 engineers who have completed over 30 large-scale projects for the A320, the A330/A340 and the A380 programmes. Russian engineers also performed more than half of all design work on the A330-200F freighter, with its activity related to fuselage structure design, floor grids installation and junctions design. The centre currently is involved in the A320neo Sharklets design development and numerous design works for the A350 XWB programme.^[88]

On 6 April 2006 BAE Systems planned to sell its 20% share in Airbus, then "conservatively valued" at €3.5 billion (US$4.17 billion).^[89] Analysts suggested the move to make partnerships with U.S. firms more feasible, in both financial and political terms.^[90] BAE originally sought to agree on a price with EADS through an informal process. Due to lengthy negotiations and disagreements over price, BAE exercised its put option, which saw investment bank Rothschild appointed to give an independent valuation.

In June 2006 Airbus was embroiled in significant international controversy over an announcement of further delays in the delivery of its A380. Following the announcement the value of associated stock plunged by up to 25% in a matter of days, although it soon recovered afterwards. Allegations of insider trading on the part of Noël Forgeard, CEO of EADS, its majority corporate parent, promptly followed. The loss of associated value was of grave concern to BAE, press described a "furious row" between BAE and EADS, with BAE believing the announcement was designed to depress the value of its share.^[91] A French shareholder group filed a class action lawsuit against EADS for failing to inform investors of the financial implications of the A380 delays while airlines awaiting deliveries demanded compensation.^[92] As a result, EADS chief Noël Forgeard and Airbus CEO Gustav Humbert resigned on 2 July 2006.^[93]

On 2 July 2006 Rothschild valued BAE's stake at £1.9 billion (€2.75 billion), well below the expectation of BAE, analysts, and even EADS.^[94] On 5 July BAE appointed independent auditors to investigate how the value of its share of Airbus had fallen from the original estimates to the Rothschild valuation; however in September 2006 BAE agreed to the sale of its stake in Airbus to EADS for £1.87 billion (€2.75 billion, $3.53 billion), pending BAE shareholder approval.^[95] On 4 October shareholders voted in favour of the sale,^[96] leaving Airbus entirely owned by EADS.

2008–2013

On 29 February 2008, the United States Air Force awarded a $35 billion contract for aerial refueling tankers (the KC-45) to Northrop Grumman, with EADS as a major subcontractor. The contract, one of the largest created by the Department of Defence, is initially valued at $35 billion but has the potential to grow to $100 billion.

Under the contract, Northrop Grumman and EADS would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes. While final assembly of the craft would take place at an Airbus plant near Mobile, Alabama, parts would come from suppliers across the globe.^[97]

However, the award was protested by Boeing, the other bidder on the project, which was upheld by the GAO. In response to the new contest, on 8 March 2010, Northrop Grumman announced it was abandoning its bid for the new contract, with its CEO stating that the revised bid requirement favored Boeing.^[98] On 20 April 2010, EADS announced it was re-entering the competition and intended to enter a bid with the KC-45.^[99]

EADS reported a 763 million euros loss for 2009 as a result of a 1.8 billion euros charge on the troubled Airbus A400M project and a 240 million euros charge related to the A380.^[100]

On 12 September 2012 it was reported^[101] that BAE and EADS were in discussions regarding a possible merger. In the event of the merger, BAE shareholders would own 40 % and EADS 60 % of the new enlarged organisation.^[102][103] A key French EADS shareholder Lagardere asked EADS to rethink the proposed merger plan as the conditions were unsatisfactory.^[104] The bosses of BAE Systems and EADS issued a joint statement seeking political support for their proposed 35 billion euro (US$45 billion) merger from the British, French and German governments; and reiterated that the combination is borne out of opportunity, not necessity and the new company would be greater than the sum of its parts.^{[105][106][107]} It was reported on 10 October 2012, that the merger between BAE Systems and EADS had been called off.^[108]

From EADS NV to Airbus SE

In January 2014, EADS was reorganised as Airbus Group NV, with three divisions (Airbus, Airbus Defence and Space, and Airbus Helicopters.^{[12][109][110]} On 27 May 2015 the company became a Societas Europaea (SE) (Latin: European Company), having been a Naamloze vennootschap (public limited company).^[13] In September 2016, Airbus Group announced that it would merge with its largest division, Airbus SAS, into a new entity and introduce a single Airbus brand,^[111] the merge to take effect on 1 January 2017.^[112] The group reorganized under the brand name of "Airbus" in January 2017. The subsidiaries Airbus Helicopters and Airbus Defence and Space became operating divisions of the same company.^[113] Airbus Group SE changed its legal name to Airbus SE at its 2017 annual meeting on 12 April 2017.^[15]

2007 restructuring of Airbus SAS

On 9 October 2006 Christian Streiff, Humbert's successor, resigned due to differences with parent company EADS over the amount of independence he would be granted in implementing his reorganisation plan for Airbus.^[114] He was succeeded by EADS co-CEO Louis Gallois, bringing Airbus under more direct control of its parent company.

On 28 February 2007, CEO Louis Gallois announced the company's restructuring plans. Entitled Power⁸, the plan would see 10,000 jobs cut over four years; 4,300 in France, 3,700 in Germany, 1,600 in the UK and 400 in Spain. 5,000 of the 10,000 would be at subcontractors. Plants at Saint Nazaire, Varel and Laupheim face sell off or closure, while Meaulte, Nordenham and Filton are "open to investors".^[115] As of 16 September 2008 the Laupheim plant has been sold to a Thales-Diehl consortium to form Diehl Aerospace and while the design activities at Filton have been retained, the manufacturing operations have been sold to British company GKN.^[116] The announcements resulted in Airbus unions in France and Germany threatening strike action.^[117]

2011 A320neo record orders

At the 2011 Paris Air Show, Airbus received total orders valued at about $72.2 billion for 730 aircraft, representing a new record in the civil aviation industry. The A320neo ("new engine option") model, announced in December 2010, received 667 orders; this, together with previous orders, resulted in a total of 1029 orders within six months of launch date, creating another industry record.^[118]

2016 deal with Iran

In January 2016 Airbus announced it has signed a tentative agreement with Iran to sell 118 Airbus aircraft along with a comprehensive civil aviation cooperation package as a part of the implementation of the Joint Comprehensive Plan of Action (JCPOA).^[119] Boeing has also announced its will to sell 80 jets directly to Iran Air as part of a proposed deal worth up to $17.6bn.^[120]

However, In early July 2016, US House of Representatives passed amendments that would block US Department of Treasury funds from granting export licences or reexport of passenger commercial aircraft. Boeing reacted that if its deal with Iran is blocked by the US Congress, all other companies that supply to its rivals should be prohibited as well. Airbus, too, has said that it requires US's approval to export airliners to Iran, because parts of its aircraft are made in the US.^[121]

The deal between Iran Air and Airbus was finally implemented, and the first new purchased Airbus aircraft, an A321, landed in Tehran's International Mehr Abad Airport on January 12, 2017; Airbus stated that the delivery has been in full compliance with the JCPOA and US government Office of Foreign Assets Control licenses.^[122]

2017

On 30 June, Airbus said its airliner sales team would now report directly to Tom Enders and by-pass Fabrice Bregier, which will lead programs, support and services, engineering, manufacturing, procurement and quality while Enders will lead sales and marketing.^[123]

On 16 October, Airbus and Bombardier Aerospace announced a partnership on the CSeries program, with Airbus acquiring a 50.01% majority stake, Bombardier keeping 31% and Investissement Québec 19%, to expand in an estimated market of more than 6,000 new 100-150 seat aircraft over 20 years; Airbus’ supply chain expertise should save production costs but headquarters and assembly remain in Québec while U.S. customers would benefit from a second Final Assembly Line in Mobile, Alabama.^[124]

In the fall, Der Spiegel investigated systematic corruption and improper intermediates usage in past sales and questioned whether Enders can survive the scandal as he did not react quickly enough, then Handelsblatt reported the French government wants to control Airbus again and Bregier wants to get Enders fired to gain his position.^[125]

Sales chief John Leahy was supposed to retire at the end of 2017 to be replaced by his deputy Kiran Rao.^[126] A few weeks before the switch, Rao told Airbus CEO Tom Enders that he was no longer available. After investigations into alleged bribery, Enders is taking personal responsibility for the sales organization compliance. Leahy should stay till a successor is found, maybe Frenchmen Eric Schulz, aerospace engineer and president of Rolls-Royce plc Civil Aerospace or Christian Scherer, CEO of ATR Aircraft, strategist and salesman.^[127] Schulz should replace Leahy on 25 January.^[128]

In November, Paul Eremenko, Airbus’s CTO, quit after two years. French unions held him for responsible for the job cuts made at a French research facility nearby Paris. Tom Enders, Airbus chief executive, was counting on Paul Eremenko to create a radically different approach to R&D.^[129]

On 28 November 2017, Airbus announced a partnership with Rolls-Royce plc and Siemens to develop the E-Fan X hybrid-electric aircraft demonstrator, to fly in 2020.^[130]

Enders CEO mandate runs until April 2019 and his reconduction is decided by Airbus' board, but in December he said would not seek a third mandate while he was in April as he is pressured over corruption investigations.^[131] On 15 December, the Board confirmed Enders will not stay beyond April 2019 and announced that in February 2018 Brégier will be replaced by Guillaume Faury, currently Airbus Helicopters CEO.^[132] The renewal should have been disclosed in early 2018, the media hype accelerated its timing but not the decision. When told by the board that he would not succeed Enders as CEO, Bregier chose to leave. Besides Enders, Bregier, Leahy and Eremenko, engineering chief Charles Champion is retiring at the end of 2017, Airbus North America chairman Allan McArtor is leaving, as is the unit’s CEO Barry Eccleston to be replaced by Jeff Knittel, CEO of lessor CIT Aerospace. Head of military aircraft Fernando Alonso, civil aircraft division COO Tom Williams and head of programs Didier Evrard are also nearing retirement.^[133]

For 2017, Airbus announced it received 1,109 net orders from 44 customers in 2017, and delivered 718 aircraft to 85 customers: 558 A320 Family (including 181 A320neo); 67 A330s; 78 A350 XWBs and 15 A380s.^[134]

2018

As UK leaves the EU, Airbus has been approached by at least seven governments (France, Germany, Spain, U.S., China, Mexico and South Korea) for wing production competitiveness. Currently produced in Broughton and designed in Filton since 1970, wing production employs 15,000, over 10% of Airbus staff. Composite wings will be needed to lower fuel burn by 30% for the A320 replacement.^[135] Tom Enders later promised the U.K. government Business Secretary Greg Clark that Airbus would retain its British operations “long into the future’’ and see the U.K. as a “home country and a competitive place to invest.’’ ^[136] Airbus will designate a new CEO to succeed Enders by the end of 2018, which will be submitted to shareholders at the spring 2019 annual meeting, with planemaking boss and former Eurocopter head Guillaume Faury as the main internal candidate.^[137]

Competition with Boeing

Airbus is in tight competition with Boeing every year for aircraft orders although Airbus has secured over 50% of aircraft orders in the decade since 2003.^[140]

Airbus won a greater share of orders in 2003 and 2004. In 2005, Airbus achieved 1111 (1055 net) orders,^[141] compared to 1029 (net of 1002) for the same year at rival Boeing^[142] However, Boeing won 55% of 2005 orders proportioned by value; and in the following year Boeing won more orders by both measures. Airbus in 2006 achieved its second best year ever in its entire 35-year history in terms of the number of orders it received, 824, second only to the previous year.^[143] Airbus plans to increase production of A320 airliners to reach 40 per month by 2012, at a time when Boeing is increasing monthly 737 production from 31.5 to 35 per month.^[144]

Regarding operational aircraft, there were 7,264 Airbus aircraft operational at April 2013.^[140] Although Airbus secured over 50% of aircraft orders in the decade since 2003, the number of Boeing aircraft still in operation at April 2013 still exceeded Airbus by 21% because Airbus made a late entry into the market, 1972 vs. 1958 for Boeing; this lead is diminishing as older aircraft are progressively retired.

Though both manufacturers have a broad product range in various segments from single-aisle to wide-body, their aircraft do not always compete head-to-head. Instead they respond with models slightly smaller or bigger than the other in order to plug any holes in demand and achieve a better edge. The A380, for example, is designed to be larger than the 747. The A350XWB competes with the high end of the 787 and the low end of the 777. The A320 is bigger than the 737-700 but smaller than the 737–800. The A321 is bigger than the 737–900 but smaller than the previous 757-200. Airlines see this as a benefit since they get a more complete product range, from 100 seats to 500 seats, than if both companies offered identical aircraft.^[145]

In recent years the Boeing 777 has outsold its Airbus counterparts, which include the A340 family as well as the A330-300. The smaller A330-200 competes with the 767, outselling its Boeing counterpart in recent years. The A380 is anticipated to further reduce sales of the Boeing 747, gaining Airbus a share of the market in very large aircraft, though frequent delays in the A380 programme have caused several customers to consider the refreshed 747–8.^[146] Airbus has also proposed the A350 XWB to compete with the Boeing 787 Dreamliner, after being under great pressure from airlines to produce a competing model.^[147][148]

A³

In 2015, Airbus Group said it was establishing a R&D center and venture capital fund in Silicon Valley.^[149][150] Airbus CEO Fabrice Bregier stated: "What is the weakness of a big group like Airbus when we talk about innovation? We believe that we have better ideas than the rest of the world. We believe that we know because we control the technologies and platforms. The world has shown us in the car industry, the space industry and the hi-tech industry that this is not true. And we need to be open to others' ideas and others' innovations,"^[151]

Airbus Group CEO Tom Enders stated that "The only way to do it for big companies is really to create spaces outside of the main business where we allow and where we incentivize experimentation... That is what we have started to do but there is no manual... It is a little bit of trial and error. We all feel challenged by what the Internet companies are doing."^[152]

Six months after launch, the Airbus Group Venture fund in Silicon Valley became fully operational in January 2016.^[153]

Historical emblems

Emblems of Airbus Industrie GIE (1970–2000) and Airbus SAS (2001–2016), until the latter on 1 January 2017 merged with its parent company, Airbus Group SE:

• 1970–2000

• 2001–2010

• 2010–2013

• 2014–2016

Emblems of the European Aeronautic Defence and Space Company NV (2000–2014), Airbus Group NV (2014–2015) and Airbus Group SE (2015–2017):

• 2000–2010

• 2010–2013

• 2014–2017

• 2017-

Products

Civilian

The Airbus product line started with the A300, the world's first twin-aisle, twin-engined aircraft. A shorter, re-winged, re-engined variant of the Airbus A300|A300 is known as the A310.

Building on its success, Airbus launched the A320, particularly notable for being the first commercial jet to use a fly-by-wire control system. The A320 has been, and continues to be, a great commercial success. The A318 and A319 are shorter derivatives with some of the latter under construction for the corporate business jet market as Airbus Corporate Jets. A stretched version is known as the A321. The A320 family's primary competitor is the Boeing 737 family.^[154]

The longer-range widebody products— the twin-jet A330 and the four-engine A340— have efficient wings, enhanced by winglets. The Airbus A340-500 has an operating range of 16,700 kilometres (9,000 nmi), the second longest range of any commercial jet after the Boeing 777-200LR (range of 17,446 km or 9,420 nautical miles).^[155]

All Airbus aircraft developed since then have cockpit systems similar to the A320, making it easier to train crew. Production of the four-engine A340 was ended in 2011 due to lack of sales compared to its twin-engine counterparts, such as the Boeing 777.^[156]

Airbus is studying a replacement for the A320 series, tentatively dubbed NSR, for "New Short-Range aircraft".^[157][158] Those studies indicated a maximum fuel efficiency gain of 9–10% for the NSR. Airbus however opted to enhance the existing A320 design using new winglets and working on aerodynamical improvements.^[159] This "A320 Enhanced" should have a fuel efficiency improvement of around 4–5%, shifting the launch of an A320 replacement to 2017–2018.

On 24 September 2009, the COO Fabrice Bregier stated to Le Figaro that the company would need from €800 million to €1 billion over six years to develop the new aircraft generation and preserve the company technological lead from new competitors like C919,^[160] scheduled to operate by 2015–2020.^[161]

In July 2007, Airbus delivered its last A300 to FedEx, marking the end of the A300/A310 production line. Airbus intends to relocate Toulouse A320 final assembly activity to Hamburg, and A350/A380 production in the opposite direction as part of its Power8 organisation plan begun under ex-CEO Christian Streiff.^[162]

Airbus supplied replacement parts and service for Concorde until its retirement in 2003.^[163][164]

The Airbus Corporate Jets markets and modifies new aircraft for private and corporate customers. It has a model range that parallels the commercial aircraft offered by the company, ranging from the A318 Elite to the double-deck Airbus A380 Prestige. Following the entry of the 737 based Boeing Business Jet, Airbus joined the business jet market with the A319 Corporate Jet in 1997. Although the term Airbus Corporate jet was initially used only for the A319CJ, it is now often used for all models, including the VIP widebodies. As of December 2008, 121 corporate and private jets are operating, 164 aircraft have been ordered, including an A380 Prestige and 107 A320 family Corporate Jet.^[165]

Consumer products

In June 2013, Airbus announced that it was developing a range of "smart suitcases" known as Bag2Go for air travellers, in conjunction with luggage-maker Rimowa and IT firm T-Systems.^[166][167] The cases feature a collection of built-in electronic gadgets which communicate with a smartphone app and with the IT systems of the airline, to assist the traveller and improve reliability and security of baggage handling. Gadgets include a weighing scale and a location tracker, using GPS for location-tracking, RFID for identification, and a SIM card for messaging.^[168][169] Since then, similar products, with more gadgets, have been announced by Delsey and Bluesmart.^{[citation needed]}

Military

In the late 1990s Airbus became increasingly interested in developing and selling to the military aviation market. It embarked on two main fields of development: aerial refuelling with the Airbus A310 MRTT (Multi-Role Tanker Transport) and the Airbus A330 MRTT, and tactical airlift with the A400M.

In January 1999 Airbus established a separate company, Airbus Military SAS, to undertake development and production of a turboprop-powered tactical transport aircraft, the Airbus Military A400M.^[170][171] The A400M is being developed by several NATO members, Belgium, France, Germany, Luxembourg, Spain, Turkey, and the UK, as an alternative to relying on foreign aircraft for tactical airlift capacity, such as the Ukrainian Antonov An-124 Ruslan^[172] and the American C-130 Hercules.^[173][174] The A400M project has suffered several delays;^[175][176] Airbus has threatened to cancel the development unless it receives state subsidies.^[177][178]

Pakistan placed an order for the Airbus A310 MRTT in 2008, which will be a conversion of an existing airframe as the base model A310 is no longer in production.^[179] On 25 February 2008 Airbus won an order for three air refuelling MRTT aircraft, adapted from A330 passenger jets, from the United Arab Emirates.^[180] On 1 March 2008 a consortium of Airbus and Northrop Grumman had won a $35 billion contract to build the new in-flight refuelling aircraft KC-45A, a US built version of the MRTT, for the USAF.^[181] The decision drew a formal complaint from Boeing,^[182][183] and the KC-X contract was cancelled to begin bidding afresh.^[184][185]

New supersonic passenger plane

In September 2014, Aerion partnered with Airbus (mainly Airbus Defence)^[186] to collaborate on designing the Aerion AS2, a supersonic 11-seater private business jet, hoping for a market entry in 2021.^[187]

Airbus aircraft numbering system

The Airbus numbering system is an alpha numeric model number followed by a dash and a three digit number.^[188]

The model number often takes the form of the letter "A" followed by a '3', a digit, then followed normally by a '0', for example A330. There are some exceptions such as: A318, A319, A321 and A400M. The succeeding three digit number represents the aircraft series, the engine manufacturer and engine version number respectively. To use an A320-200 with International Aero Engines (IAE) V2500-A1 engines as an example; The code is 2 for series 200, 3 for IAE and engine version 1, thus the aircraft number is A320-231.

An additional letter is sometimes used. These include, 'C' for a combi version (passenger/freighter), 'F' for a freighter model, 'R' for the long range model, and 'X' for the enhanced model.

Engine codes

Orders and deliveries

* All models included.

Data as of 31 December 2017.^[189]

Organisation

Divisions

Commercial aircraft

Commercial aircraft generated 67% of total revenue for the group in 2013.^[191] The product portfolio of such aircraft encompasses short range models such as the A320 family and the world's largest passenger airliner, the A380.

• EADS Sogerma
• Airbus Executive and Private Aviation

Defence and Space

The division Airbus Defence and Space was formed in January 2014 as part of the group restructuring from the former EADS divisions Airbus Military, Astrium, and Cassidian (composed of Cassidian Electronics – develops and manufactures sensors, radars, avionics and electronic warfare systems for military and security applications, Cassidian Air Systems – develops manned and unmanned aerial systems (UAVs), mission avionics, electronic defence and warning systems and Cassidian Systems – provides global security solutions such as command & control, lead system integration, TETRA and TETRAPOL communication systems for public safety, industry, transportation and defence. This line of business was the first one in the world to begin field tests with TETRA Enhanced Data Service (TEDS).^[192]).^[193]

• EADS 3 Sigma – a Hellenic company focused in the design, development, production and services provision of airborne and surface target drone systems.

The Airbus Military division, which manufactured tanker, transport and mission aircraft; Eurocopter, the world's largest helicopter supplier; Astrium, provided systems for aerial, land, naval and civilian security applications including Ariane, Galileo and Cassidian. Through Cassidian, EADS was a partner in the Eurofighter consortium as well as in the missile systems provider MBDA.

Helicopters

Airbus Helicopters, formerly known as Eurocopter, is a helicopter manufacturing and support company. See also: Airbus Helicopters, Inc.

Subsidiaries

• Airbus Group Inc. – (previously EADS North America) the U.S. holding company for the North American activities of Airbus Group
• Airbus Transport International - Cargo Airline managing the transportation of Airbus parts between different facilities.
• Stelia Aerospace
• HENSOLDT
• EADS EFW
• Dornier Consulting
• Premium AEROTEC^[194]
• Airbus APWorks^[195]
• Tesat-Spacecom (de)
• Satair

Joint ventures

In September 2014 Airbus considered divesting Dassault and several other units to focus on aerospace.^[196] They reduced their shareholding in Dassault Aviation to 10 % by the end of 2016.

Governance

The corporate management of the Airbus Group as of March 2017:^[197]

Chief Executive Officer: Thomas Enders

Executive Committee:

The original Executive Committee is appointed by the board of directors, itself appointed by Daimler AG and SOGEADE. Both appoint four directors plus one independent director. As of July 2003 SEPI no longer nominates a board member, but a Spanish director is retained as the 11th member.^[198] The board also appoints the company's chairpersons, one from the Daimler nominated directors and from the SOGEADE nominated directors. In late 2004 Noël Forgeard (then Airbus CEO) was nominated by Lagardère as the next French CEO of EADS. Forgeard had suggested that this system should be abolished in favour of a single CEO in a move that DaimlerChrysler saw as an attempt to engineer a French dominated management team. Following protracted arguments, which caused embarrassment to EADS at the Paris Air Show, the appointment was confirmed by the EADS Board of Directors on 25 June 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert as President and CEO of Airbus.^[199]

Corporate affairs

The subsidiary Airbus Middle East is headquartered in the Dubai Airport Free Zone.^[200] This subsidiary opened in 2006.^[201]

The subsidiary Airbus Japan K.K. (エアバス・ジャパン株式会社) is headquartered in the Roppongi Hills Mori Tower in Roppongi, Minato, Tokyo.^[202]

International manufacturing presence

Airbus has several final assembly lines for different models and markets. These are:

• Toulouse, France (A320, A330 family, A350 family and A380)
• Hamburg, Germany (A318, A319 and A321)
• Seville, Spain (A400M)
• Tianjin, China (A319 and A320).
• Mobile, Alabama, US (A319, A320 and A321)

Airbus, however, has a number of other plants in different European locations, reflecting its foundation as a consortium. An original solution to the problem of moving aircraft parts between the different factories and the assembly plants is the use of the Airbus Beluga, a modified cargo aircraft capable of carrying entire sections of fuselage. This solution has also been investigated by Boeing, which retrofitted 4 747-400s to transport the components of the 787. An exception to this scheme is the A380, whose fuselage and wings are too large^[203] for sections to be carried by the Beluga. Large A380 parts are brought by ship to Bordeaux, and then transported to the Toulouse assembly plant by the Itinéraire à Grand Gabarit, a specially enlarged waterway and road route.

Airbus opened an assembly plant in Tianjin, People's Republic of China for its A320 series airliners in 2009.^{[204][205][206]} Airbus started constructing a $350 million component manufacturing plant in Harbin, China in July 2009, which will employ 1,000 people.^{[207][208][209]} Scheduled to be operated by the end of 2010, the 30,000 square metre plant will manufacture composite parts and assemble composite work-packages for the A350 XWB, A320 families and future Airbus programmes. Harbin Aircraft Industry Group Corporation, Hafei Aviation Industry Company Ltd, AviChina Industry & Technology Company and other Chinese partners hold the 80% stake of the plant while Airbus control the remaining 20%.^[210]

North America is an important region to Airbus in terms of both aircraft sales and suppliers. 2,000 of the total of approximately 5,300 Airbus jetliners sold by Airbus around the world, representing every aircraft in its product line from the 107-seat A318 to the 565-passenger A380, are ordered by North American customers. According to Airbus, US contractors, supporting an estimated 120,000 jobs, earned an estimated $5.5 billion (2003) worth of business. For example, one version of the A380 has 51% American content in terms of work share value.

Plans for a Mobile, Alabama aircraft assembly plant were unveiled by Airbus CEO Fabrice Brégier from the Mobile Convention Centre on 2 July 2012. The plans include a $600 million factory at the Mobile Aeroplex at Brookley for the assembly of the A319, A320 and A321 aircraft. It could employ up to 1,000 full-time workers when operational. Construction began on 8 April 2013, and became operable by 2015,^[211] producing up to 50 aircraft per year by 2017.^[212][213]

Financial information

In October 2005 the British Ministry of Defence warned European politicians to stop, as it sees it, interfering in the corporate governance of EADS. The former UK Defence Procurement Minister Lord Drayson hinted that the UK government, a major customer for EADS, may withhold future contracts. "As a key customer, we see it as important for EADS to move in a direction that is free from political interference."^[214]

On 4 April 2006, DaimlerChrysler announced its intention to reduce its shareholding from 30 % to 22.5 %. The company places a value of the stake at "approximately €2.0 billion."^[215] Lagardère will reduce its holding by an identical amount. However, Caisse des Dépôts et Consignations, a unit of the French government, acquired 2.25 % of EADS. At issue as a result is the fact that the German and French shareholdings are now in imbalance.^[216]

On 30 August 2006, shortly after the stock price decline caused by the A380 delivery delays, more than 5 % of EADS stock has been reportedly purchased by the Russian state-owned Vneshtorgbank.^[217] Now its share is nearly 6 %. In December 2007, Vneshtorgbank sold EADS shares to another state-controlled bank Vneshekonombank. EADS sharers are to be delivered by Vneshekonombank to the charter capital of JSC "United Aircraft Corporation" in 2008.^{[citation needed]}

On 3 October 2006, shortly after EADS admitted further delays in the Airbus 380 programme would cost the company 4.8 billion euros in lost earnings in 2010, EADS shares, traded on the Paris arm of Euronext, were suspended after they surpassed the 10 % loss limit. Trading resumed later in the day with the one-day loss holding at 7 %.

In 2007, Dubai Holding acquired 3.12 % of EADS stock, making the Dubai buy-out fund one of the largest institutional shareholders.^[218]

In 2008, EADS had arms sales equivalent of $17.9 billion, which constituted 28 % of total revenue.^[219]

In April 2013, Daimler sold its shares in EADS.^[220]

As of 30 September 2015^[update], 74 % of Airbus Group stock is publicly traded on six European stock exchanges, while the remaining 25.9 % is owned by a "Contractual Partnership".^[5] As at 31 December 2014, the partnership is owned by SOGEPA (10.94%), GZBV (10.92%) and SEPI (4.12%). SOGEPA is owned by the French State, GZBV is majority owned by KfW, while SEPI is a Spanish state holding company.^[221]

Sales of military equipment in 2012 amounted to 15.4 billion US dollars.^[223]

Environmental record

Airbus has committed to the "Flightpath 2050", an aviation industry plan to reduce noise, CO₂, and NOx emissions.^[224]

Airbus was the first aerospace business to become ISO 14001 certified, in January 2007; this is a broader certification covering the whole organisation, not just the aircraft it produces.^[225]

Biofuel

Airbus has joined Honeywell and JetBlue in an effort to reduce pollution and dependence on oil. They are trying to develop a biofuel that could be used by 2030. The companies propose supplying almost one third of the world's aeroplane fuel needs without affecting food resources. Algae is viewed as a possible alternative energy source because it absorbs carbon dioxide during its growth, and because its use will not affect food production. However, algae and other vegetation-based fuels are still just experiments, and fuel-bearing algae has been expensive to develop.^[226] Airbus recently operated the first alternative fuel flight on a mixture of 60% kerosene and 40% gas to liquids (GTL) fuel in one engine. It did not cut carbon emissions, but it was free of sulphur emissions.^[227] Alternative fuel was able to work properly in Airbus' aeroplane engine, demonstrating that alternative fuels should not require new aeroplane engines. This flight and the company's long term efforts are considered big strides towards environmentally friendly aeroplanes.^[227]

Controversies

Cluster bomb allegation

In 2005 the Government Pension Fund of Norway recommended the exclusion of several companies producing cluster bombs or components. EADS and its sister company EADS Finance BV were among them, arguing that EADS manufactures "key components for cluster bombs". The criticism was centred around TDA, a joint venture between EADS and Thales S.A. TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this definition has since been successfully battled by EADS. EADS and its subsidiaries are now regarded as fulfilling all the conditions of the Ottawa Treaty. According to the new point of view, no product of EADS or its subsidiaries falls into the category of antipersonnel mines as defined by the Ottawa Treaty ("landmines under the Ottawa Treaty"). In April 2006, the fund declared that the basis for excluding EADS from investments related to production of cluster munitions is no longer valid, however its shareholding of MBDA means the fund still excludes EADS due to its indirect involvement in nuclear weapons production.^[228]

Allegations of bribery

Saudi Arabia

In August 2012 the UK Serious Fraud Office opened a criminal investigation into an EADS subsidiary, GPT Special Project Management Ltd, in connection with bribery allegations made by the subsidiary's former programme director, Ian Foxley. Foxley alleged that luxury cars were bought for senior Saudis, and that millions of pounds sterling was paid to mysterious Cayman Islands companies, and that this may have been done to secure a £2 billion contract to renew the Saudi Arabian National Guard's military telecommunications network.^[229] Foxley's allegations were backed up by two other GPT employees.^[230]

South Africa

In 2003 Tony Yengeni, former chief whip of South Africa's African National Congress, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players,^[231] worth around $5 billion. BBC reported that EADS had admitted that it had "rendered assistance" to some 30 senior officials to obtain luxury vehicles, including defence force chief General Siphiwe Nyanda.^[232] In March 2003 the South African State completely withdrew the charges of bribery against the former head of EADS South Africa.^[233] In September 2004 the Munich prosecutor's office issued a formal order on dismissal regarding the bribery charges against him due to his innocence in relation to the said car sales (file no. 572 Js 39830/01).

Turkey

According to the investigation conducted by the Guardian Newspaper, Airbus has launched an internal investigation into possible corruption after the Guardian uncovered a series of questionable financial transactions resulting in an unexplained payment.

Hundreds of pages of leaked bank records, internal memos and financial statements reveal that two companies secretly controlled by the aviation giant engaged in transactions involving €19m (£16.7m), a large part of which was then routed to a mysterious company via a tax haven.

The scheme hinges on an unexplained purchase of shares between two purportedly independent companies in 2007. Eolia Limited, a Maltese company in the business of retrofitting passenger jets to transport cargo, bought 26% of Avinco Holdings, a Dutch company that sells secondhand aircraft and helicopters. Both companies present themselves to the world as independent entities. Neither company’s website mentions any significant external support or backing from other firms. In reality, however, both companies were secretly under Airbus’s effective control.

This payment was allegedly the tip of the iceberg with a slush fund of around EUR 80 million created at the level of PSP Conversions LLP, Eolia Limited's subsidiary in Cyprus. ^[234]

Insider trading investigation

On 2 June 2006 co-CEO Noël Forgeard and Airbus CEO Gustav Humbert resigned following the controversy caused by the June 2006 announcement that deliveries of the A380 would be delayed by a further six months. Forgeard was one of a number of executives who exercised stock options in November 2005 and March 2006. He and 21 other executives are under investigation as to whether they knew about the delays in the Airbus A380 project which caused a 26 % fall in EADS shares when publicised.^[235]

The French government's actions were also under investigation; The state-owned bank Caisse des Dépots et Consignations (CDC) bought part of Lagardère's 7.5 % stake in EADS in April 2006, allowing that latter to partially escape the June 2006 losses.^[235]

Subsidy conflicts

Boeing has continually protested over "launch aid" and other forms of government aid to Airbus, while Airbus has argued that Boeing receives illegal subsidies through military and research contracts and tax breaks.^[236]

In July 2004 former Boeing CEO Harry Stonecipher accused Airbus of abusing a 1992 bilateral EU-US agreement providing for disciplines for large civil aircraft support from governments. Airbus is given reimbursable launch investment (RLI), called "launch aid" by the US, from European governments with the money being paid back with interest plus indefinite royalties, but only if the aircraft is a commercial success.^[237] Airbus contends that this system is fully compliant with the 1992 agreement and WTO rules. The agreement allows up to 33 per cent of the programme cost to be met through government loans which are to be fully repaid within 17 years with interest and royalties. These loans are held at a minimum interest rate equal to the cost of government borrowing plus 0.25%, which would be below market rates available to Airbus without government support.^[238] Airbus claims that since the signature of the EU-US agreement in 1992, it has repaid European governments more than U.S.$6.7 billion and that this is 40% more than it has received.

Airbus argues that the military contracts awarded to Boeing, the second largest U.S. defence contractor, are in effect a form of subsidy, such as the controversy surrounding the Boeing KC-767 military contracting arrangements. The significant U.S. government support of technology development via NASA also provides significant support to Boeing, as do the large tax breaks offered to Boeing, which some people claim are in violation of the 1992 agreement and WTO rules. In its recent products such as the 787, Boeing has also been offered direct financial support from local and state governments.^[239]

In January 2005 the European Union and United States trade representatives, Peter Mandelson and Robert Zoellick respectively, agreed to talks aimed at resolving the increasing tensions.^[240][241] These talks were not successful with the dispute becoming more acrimonious rather than approaching a settlement.^[242]

WTO ruled in August 2010 and in May 2011 that Airbus had received improper government subsidies through loans with below market rates from several European countries.^[243] In a separate ruling in February 2011, WTO found that Boeing had received local and federal aid in violation of WTO rules.^[244]

See also

• Airbus Training Centre Europe
• European Union defence procurement
• Aerospace industry in the United Kingdom
• Airbus affair – ongoing controversy over Air Canada deal
• Boeing
• Bombardier Aerospace
• Comac
• Competition between Airbus and Boeing
• Embraer
• Stelia Aerospace
• Thor – World's first 3D-printed aircraft
• United Aircraft Corporation