BAe likely to cut Airbus stake if restructuring goes ahead

British Aerospace is likely to reduce its stake in Airbus Industrie if it wins its battle to turn the plane-building consortium into a separately incorporated group instead of a partnership.

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.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific