New Airbus CEO Vows to Press On
The new head of Airbus pledged Tuesday to go ahead with plans to develop a new mid-size jetliner and impose cost reductions, both items that were identified by his predecessor, who quit amid a leadership struggle.
Louis Gallois, appointed Monday to succeed Christian Streiff as chief executive, said he was in favor of pressing ahead with the A350 XWB program. The A350 would be a competitor to Boeing Co.’s 787 Dreamliner.
“I believe that Airbus has to be present across the whole market, and the A350 is the middle of the market,” Gallois said in an interview with Europe-1 radio. The A350’s mid-size category accounts for 40% of the jetliner market by value, he added.
Gallois also said Airbus’ turnaround plan would involve painful job cuts, without giving details.
French financial daily La Tribune reported on its website that Airbus managers were discussing measures to cut 10,000 of the company’s 56,000 European employees. The company has denied that report.
Shares in European Aeronautic Defense & Space Co., which owns 80% of Airbus, rose 3.6% on Tuesday in Paris. The stock is still down 35% since the start of the year and 7.8% below its Oct. 3 closing price -- just before the European plane maker announced a third delay in deliveries of its A380 super-jumbo jet.
After concentrating massive resources on the 555-seat A380, Airbus has been outmaneuvered by Boeing’s two-engine 787, which is expected to deliver significantly better fuel economy.
Boeing has received more than three times as many airliner orders than Airbus this year.
Doubts had been growing over the $10-billion A350 program announced by Streiff in July. EADS is facing a financial crunch as a result of the A380 program’s soaring costs and a weaker U.S. dollar, which hits revenue in euros from Airbus’ dollar-denominated jet sales.
Airbus stunned investors in June by doubling A380 production delay to one year, then doubled it again to two years this month, saying the problems would wipe $6.1 billion off EADS profit over the next four years.
