Airbus tied to parent's apron strings as £12bn flotation plan is grounded

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It's beaten Boeing but Airbus can't take off

The planned 20 billion euro (£12.5bn) flotation of Airbus has been put on hold because its 80 per cent shareholder, EADS, is doing so poorly.

The block could lead BAE Systems to seek an early sale of its 20 per cent stake in Airbus, with Finmeccanica of Italy seen as the most likely buyer.

The pan-European aviation and defence group has singularly failed to make headway in the competitive world defence market since it was formed in 1999, and its lack of success has been put into sharp relief by the soaring growth of Airbus. The commercial airplane firm, whose new A380 superjumbo has secured more than 60 orders already, is now accounting for 75 per cent of EADS' revenues and without it the group would plunge even more deeply into the red.

EADS' forthright joint chief executive, Rainer Hertrich, is understood to have told Airbus's chief executive, Noel Forgeard, that there can be no flotation until EADS no longer needs the "Airbus cash cow".

Sources close to Airbus said that the company feared this could be "five or six years off at least".

The block on the float is likely to cause a rift with BAE, which owns 20 per cent of Airbus and is keen to cash in its investment.

BAE negotiated an option to sell out of Airbus when it agreed the deal that turned the business from a consortium into a company a year ago.

The agreement said that BAE could sell out after three years or if there was a material change to the structure of the company.

However, the speculation ahead of the Paris Air Show, which starts today at Le Bourget, is that it would be in both Airbus's and BAE's interest if the UK company was allowed to sell in the near future.