Airbus partners strike a deal

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The Independent Online
The four partners in Airbus Industrie last night reached agreement on plans to turn the aircraft manufacturer into a fully commercial limited company.

However, details of how the new company will be structured and what assets the partners will put into it will not emerge until a binding memorandum of understanding has been signed "over the next few days".

The delay in making a full announcement prompted speculation that the partners still had to iron out agreement on the timetable for progress towards Airbus becoming a full commercial entity.

Nevertheless, the fact that Airbus was able to make any statement at all following the meeting in Paris was taken as a step forward.

There has been a sharp disagreement between the partners as to what the new company should consist of. British Aerospace and Germany's Daimler Benz have been pressing for Airbus to take control of each partner's manufacturing operations. Aerospatiale of France was said to be resisting such far- reaching change, preferring Airbus to remain a design and marketing consortium.

At present the four partners - the other member of the consortium is Casa of Spain - divide the work according to their respective shareholdings, charge Airbus for their contribution and account for profit or loss separately.

The fact that agreement has been reached on an MOU suggests that the Anglo-German axis has won the day. The delay in providing details of the new accord suggests that the partners have still to hammer out the time scale over which they hand their assets over to the new commercial entity.

"This is a very careful game of chess being played a piece at a time," said one observer. A BAe spokesman added that it was very satisfied with the outcome of yesterday's meeting.

The plan remains to have the new business up and running in 1999 with the ultimate intention of floating the business on the world's capital markets.

A report late last year from the US investment bank Lehman Brothers suggested that Airbus could be worth as much as $18bn when it is floated and that profits before development costs and launch aid repayments could reach $21bn over the next seven years.

However, much will depend on whether Airbus proceeds with the $12bn launch of the A3XX - a new 600-plus seater super-jumbo jet to take on Boeing in the large jet market.

BAe has a 20 per cent stake in Airbus, Daimler and Aerospatiale each hold 38 per cent while Casa has a 4 per cent stake.