BAe likely to cut Airbus stake if restructuring goes ahead
Monday 25 March 1996
Pressure to reform the structure of Airbus is mounting, following threats last week from the German government to withhold subsidies for the development of the partnership's next aircraft unless it begins a reorganisation.
Under the present arrangements, work is shared by members of Airbus according to their participation.This has been criticised by the UK and Germany as inefficient. France, the third member of the partnership - through the Aerospatiale group - is resisting change.
Britain and Germany want Airbus turned into a conventional company with managerial freedom to make decisions about cost cuts without referring back to the partners at every move.
British Aerospace sources dismissed press speculation that it would be seeking an increase in its present 20 per cent stake if Airbus is restructured.
The main reason is that new shareholders may need to be invited to join Airbus if it is incorporated and a reduction in the stakes of the existing partners - BAe has 20 per cent - would be necessary to accommodate this.
The pressure for restructuring goes hand in hand with Airbus's plans to build a new super-jumbo, the 550-seater A3XX, costing pounds 5bn. The existing partners will be unable to raise the capital, the reason they are talking of bringing further partners into the consortium.
The likeliest candidates are organisations from Asia and the Pacific Rim, where growth of airline orders is expected to be strongest over the next 20 years. Companies from Taiwan, South Korea and China are thought to be the most likely to join.
Boeing's authoritative annual survey of the airline market earlier this month estimated that airlines will spend $1,100bn buying about 16,000 aircraft over the next 20 years. The bulk of the demand will come from Asia-Pacific.
If Airbus becomes a separately incorporated company it will have more freedom to buy components from the most economic sources.
However, the underlying problem stalling a restructuring is that Aerospatiale, the state-owned French member of the grouping, is the least efficient and would lose most heavily from a move away from worksharing.
- 1 2015 General Election: Green party will not appear in TV debate alongside Ukip – says BBC
- 2 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 3 Of course, teenage girls need role models – but not like beauty vlogger Zoella
- 4 North Korean officials 'publicly executed for watching South Korean soap operas'
- 5 Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Elizabeth Norment dead: House of Cards actress honoured by Kevin Spacey after she dies aged 61
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
North Korean officials 'publicly executed for watching South Korean soap operas'
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
Nigel Farage and Frankie Boyle clash over Andrew Lawrence's 'Mock the Week' criticism
iJobs Money & Business
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...
£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...