Airbus shrugs off jet merger threat

Airbus Industrie, the European aircraft manufacturer, yesterday conceded that the Boeing takeover of McDonnell Douglas had increased the urgency for it to push ahead with its own restructuring into a fully commercial organisation.

But the four-nation consortium, in which British Aerospace has a 20 per cent stake, shrugged off suggestions that the merger of its two US rivals would seriously undermine its position in the civil jet market.

A source close to Airbus in Toulouse said: "This deal makes the need for Airbus to become a single corporate entity that much more acute. The four partners need to stop bickering among themselves and face up squarely to the enemy on the other side of the pond."

Claims that the $45bn merger between the world's number one and number three aircraft manufacturers might overwhelm Airbus were, however, dismissed. "People tend to forget that McDonnell Douglas is now an also-ran in the commercial aircraft market. It only accounts for 5 to 6 per cent of orders so I don't see how a merger with Boeing threatens us or makes life more difficult," said Bob Alizart, Airbus vice-president of corporate communications.

Strong backing for this view came from Sir Colin Marshall, chairman of British Airways, who said that, if anything, the Boeing deal would strengthen the hand of Airbus. Sir Colin, whose airline has never bought any Airbus aircraft, said the merger would remove from the market a bit player tempted to cause price distortions by undercutting its two bigger rivals.

Second, it would distract Boeing's attentions for at least 12 months while it was putting the merged company together.

Third, said Sir Colin, it meant that airlines would insist on shortlisting Airbus for most new aircraft orders to ensure that there remained healthy competition between two strong manufacturers.

BAe and the three other Airbus partners - Aerospatiale of France, Germany's Daimler Benz and Casa of Spain - are due to sign a binding memorandum of understanding (MOU) by the end of this year setting out how the consortium will convert into a limited commercial company by 1999.

Edzard Reuter, the Airbus chairman and former head of Daimler Benz, was quoted as saying that the Boeing merger would accelerate the three-year timetable for transition. But these remarks appeared to be contradicted by Toulouse, which said that any other target date than 1999 would be "unrealistic".

Progress towards signing the binding MOU has been slowed up by a dispute among the Airbus partners over what assets they should put into the new company and who would be responsible for them.

At present the four companies are work-sharing partners who charge Airbus for building aircraft and then take a percentage of any profit made from selling them. When Airbus transfers into a public limited status the partners will become shareholders while Airbus will be able to contract production wherever it wishes.

The deal, meanwhile, was given a strong welcome on Wall Street yesterday with shares in both companies surging in early trading and analysts agreeing that for McDonnell Douglas in particular it was the only sensible long- term option.

Harry Stonecipher, chief executive of McDonnell Douglas, said: "This was what we wanted. This was the only deal we considered. We did not shop the company around." Mr Stonecipher will be chief operating officer of the new company.

Philip Condit, chief executive of Boeing, voiced optimism that the merger would win early approval from US monopoly regulators: "Look at this on a global scale and I believe that the anti-trust issue will not be there."

At the start of New York trading, Boeing stock was up $5.75 at $102.50, increasing the value of its all-share offer to close on $15bn. More impressive was a $12.25 jump in McDonnell Douglas shares to reach $64.25.

Comment, page 15

ebooksAn unforgettable anthology of contemporary reportage
Life and Style

Board creates magnetic field to achieve lift

There have been various incidents of social media users inadvertently flouting the law

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London