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Airbus Take-Off Delayed
Airbus, the European consortium of aircraft manufacturers, is flying low these days.
Airbus chief executive, Louis Gallois, has now explained that the serious delays in plane
construction and delivery have been a "major shock and disappointment" to shareholders.
Share prices for EADS (the parent company of Airbus Industries) have recently fallen by an average of 2.8 per cent on the Paris bourse.
Many of the shareholders are French middle-aged persons and pensioners who invested their savings in Airbus Industries because they believed the company
was flying high and immune to financial difficulties. In Wall Street terms, Airbus was considered a 'blue chip' investment .
Sadly, the Toulouse-based firm has secured fewer orders for new planes than its rival, Boeing, of Seattle, for the first time since 2000.
The troubled European planemaker says it won 824 new orders last year. Boeing won 1,050.
Orders for its key Toulouse-made 'single aisle' aircraft have dropped from 918 to 673 from last year. And the number of airline companies signing-up for the flagship A380 has fallen from 20 to 17. Delays in delivery of the Superjumbo A380 has already cost the French-German consortium $ 6 billion.
Several airlines have warned that they might cancel orders for the giant A380 as a result of production delays.
Perhaps Gallois hit the nail on the head when he told reporters, with a sense of despair: "2007 will be the year for Airbus to face reality".
Maybe, deep down, Monsieur Gallois is not entirely sure whether that reality will be good or bad.
