Europe's
largest aircraft maker, Airbus is a conglomerate of companies from France, Germany,
Spain and Britain. It marked a record year in 2005 by continuing its industry
leadership in terms of market share, deliveries order intake and profitability.
The company delivered 378 airliners with total turnover of around 22.3 bn, an
increase of 12% higher than the previous year. By the end of the year, its total
deliveries put at 4,130. In 1995, Airbus had just 19% market share for big passenger
jets, compared with its arch-rival Chicago-based Boeing. However, during late
1990s, Boeing staggered badly, and Airbus took off with models like A330 against
Boeing 767. By 2005, its market share had risen sharply to 52% against Boeing
48%.
In
an attempt to build the world's largest passenger jet, Airbus started its 555-seat
A380 super-jumbo and the world's largest passenger jet and obtained orders from
top airline carriers and supposed to enter service next year. However, the company
has been caught in a storm since it revealed in June 2006 that it had run into
manufacturing problems with its A380 jet, which would delay delivery. The final
assembly-line of A380 in Toulouse ground to a halt and engineers jumbled to fix
wiring problems and already incurred costs of around $2 billion. Overall, it's
an awful time for Airbus and its ambitious new project. Against this, the value
of shares in EADS fell by 26% on June 14, 2005, nosed down 5.5 bn of total the
value of the firm. "The delivering delay of A380 is damaging, both to the
credibility of EADS management, and also to Airbus's reputation for program management,"
says Sash Tusa, Analyst, Goldman Sachs. |
