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Airbus 

“Airbus History

Airbus is the world’s leading manufacturer of commercial jetliners and military airlifters, having evolved during the past 40 years on the vision, innovation and passion of its employees.

The A300 became the world’s first twin-engine widebody jet, entering airline service in 1974.

This was followed in the early 1980s by Airbus’ shorter-fuselage A310 derivative, and was joined later that decade by the single-aisle A320 – which developed into one of the most successful aircraft families in history with the A318, A319, A320 and A321.

The 1990s saw Airbus introduce its long range A330/A340 jetliner Family, and a new era of airline travel started in 2007 when the 525-seat A380 began commercial operation.

Looking to the future, deliveries of Airbus’ long-range twin-engine A350 XWB are expected to commence in 2013, while its military product line is expanding to include the A330 Multi-role Tanker Transport and the A400M.”

“Origins

Airbus Industrie began as a consortium of European aviation firms to compete with American companies such as Boeing, McDonnell Douglas, and Lockheed.

While many European aircraft were innovative, even the most successful had small production runs. In 1991, Jean Pierson, then CEO and Managing Director of Airbus Industrie, described a number of factors which explained the dominant position of American aircraft manufacturers: the land mass of the United States made air transport the favoured mode of travel; a 1942 Anglo-American agreement entrusted transport aircraft production to the US; and World War II had left America with “a profitable, vigorous, powerful and structured aeronautical industry.”

“For the purpose of strengthening European co-operation in the field of aviation technology and thereby promoting economic and technological progress in Europe, to take appropriate measures for the joint development and production of an airbus.”

Airbus Mission Statement

In the mid-1960s, tentative negotiations commenced regarding a European collaborative approach. Individual aircraft companies had already envisaged such a requirement; in 1959 Hawker Siddeley had advertised an “Airbus” version of the Armstrong Whitworth AW.660 Argosy, which would “be able to lift as many as 126 passengers on ultra short routes at a direct operating cost of 2d. per seat mile.”However, European aircraft manufacturers were aware of the risks of such a development and began to accept, along with their governments, that collaboration was required to develop such an aircraft and to compete with the more powerful US manufacturers. At the 1965 Paris Air Show major European airlines informally discussed their requirements for a new “airbus” capable of transporting 100 or more passengers over short to medium distances at a low cost. The same year Hawker Siddeley (at the urging of the UK government) teamed with Breguet and Nord to study airbus designs. The Hawker Siddeley/Breguet/Nord group’s HBN 100 became the basis for the continuation of the project. By 1966 the partners were Sud Aviation, later Aérospatiale (France), Arbeitsgemeinschaft Airbus, later Deutsche Airbus (Germany) and Hawker Siddeley (UK). A request for funding was made to the three governments in October 1966. On 25 July 1967 the three governments agreed to proceed with the proposal.

In the two years following this agreement, both the British and French governments expressed doubts about the project. The MoU had stated that 75 orders must be achieved by 31 July 1968. The French government threatened to withdraw from the project due to the concern over funding development of the Airbus A300, Concorde and the Dassault Mercure concurrently, but was persuaded otherwise. Having announced its concern at the A300B proposal in December 1968, and fearing it would not recoup its investment due to lack of sales, the British government announced its withdrawal on 10 April 1969. Germany took this opportunity to increase its share of the project to 50%. Given the participation by Hawker Siddeley up to that point, France and Germany were reluctant to take over its wing design. Thus the British company was allowed to continue as a privileged subcontractor. Hawker Siddeley invested GB£35 million in tooling and, requiring more capital, received a GB£35 million loan from the German government.

Formation of Airbus Industrie

Airbus Industrie was formally established as a Groupement d’Intérêt Économique (Economic Interest Group or GIE) on 18 December 1970. It had been formed by a government initiative between France, Germany and the UK that originated in 1967. Its initial shareholders were the French company Aérospatiale and the German company Deutsche Airbus, each owning a 50% share. The name “Airbus” was taken from a non-proprietary term used by the airline industry in the 1960s to refer to a commercial aircraft of a certain size and range, for this term was acceptable to the French linguistically. Aérospatiale and Deutsche Airbus each took a 36.5% share of production work, Hawker Siddeley 20% and the Dutch company Fokker-VFW 7%. Each company would deliver its sections as fully equipped, ready-to-fly items. In October 1971 the Spanish company CASA acquired a 4.2% share of Airbus Industrie, with Aérospatiale and Deutsche Airbus reducing their stakes to 47.9%. In January 1979 British Aerospace, which had absorbed Hawker Siddeley in 1977, acquired a 20% share of Airbus Industrie. The majority shareholders reduced their shares to 37.9%, while CASA retained its 4.2%.

Development of the Airbus A300

The Airbus A300 was to be the first aircraft to be developed, manufactured and marketed by Airbus. By early 1967 the “A300” label began to be applied to a proposed 320 seat, twin engined airliner. Following the 1967 tri-government agreement, Roger Béteille was appointed technical director of the A300 development project. Béteille developed a division of labour which would be the basis of Airbus’ production for years to come: France would manufacture the cockpit, flight control and the lower centre section of the fuselage; Hawker Siddeley, whose Trident technology had impressed him, was to manufacture the wings; Germany should make the forward and rear fuselage sections, as well as the upper centre section; the Dutch would make the flaps and spoilers; finally Spain (yet to become a full partner) would make the horizontal tailplane. On 26 September 1967 the German, French and British governments signed a Memorandum of Understanding in London which allowed continued development studies. This also confirmed Sud Aviation as the “lead company”, that France and the UK would each have a 37.5% work share with Germany taking 25%, and that Rolls-Royce would manufacture the engines.

In the face of lukewarm support from airlines for a 300+ seat Airbus A300, the partners submitted the A250 proposal, later becoming the A300B, a 250 seat airliner powered by pre-existing engines. This dramatically reduced development costs, as the Rolls-Royce RB207 to be used in the A300 represented a large proportion of the costs. The RB207 had also suffered difficulties and delays, since Rolls-Royce was concentrating its efforts on the development of another jet engine, theRB211, for the Lockheed L-1011 and Rolls-Royce entering into administration due to bankruptcy in 1971. The A300B was smaller but lighter and more economical than its three-engined American rivals.

“We showed the world we were not sitting on a nine-day wonder, and that we wanted to realise a family of planes…we won over customers we wouldn’t otherwise have won…now we had two planes that had a great deal in common as far as systems and cockpits were concerned.”

In 1972, the A300 made its maiden flight and the first production model, the A300B2 entered service in 1974;though the launch of the A300 was overshadowed by the similarly timed supersonic aircraft Concorde.Initially the success of the consortium was poor, but orders for the aircraft picked up, due in part to the marketing skills used by Airbus CEO Bernard Lathière, targeting airlines in America and Asia. By 1979 the consortium had 256 orders for A300, and Airbus had launched a more advanced aircraft, the A310, in the previous year. It was the launch of theA320 in 1987 that guaranteed the status of Airbus as a major player in the aircraft market– the aircraft had over 400 orders before it first flew, compared to 15 for the A300 in 1972.

Transition to Airbus SAS

The retention of production and engineering assets by the partner companies in effect made Airbus Industrie a sales and marketing company. This arrangement led to inefficiencies due to the inherent conflicts of interest that the four partner companies faced; they were both GIE shareholders of, and subcontractors to, the consortium. The companies collaborated on development of the Airbus range, but guarded the financial details of their own production activities and sought to maximise the transfer prices of their sub-assemblies. It was becoming clear that Airbus was no longer a temporary collaboration to produce a single plane as per its original mission statement, it had become a long term brand for the development of further aircraft. By the late 1980s work had begun on a pair of new medium-sized aircraft, the biggest to be produced at this point under the Airbus name, the Airbus A330 and the Airbus A340. In the early 1990s the then Airbus CEO Jean Pierson argued that the GIE should be abandoned and Airbus established as a conventional company. However, the difficulties of integrating and valuing the assets of four companies, as well as legal issues, delayed the initiative. In December 1998, when it was reported that British Aerospace and DASA were close to merging, Aérospatiale paralysed negotiations on the Airbus conversion; the French company feared the combined BAe/DASA, which would own 57.9% of Airbus, would dominate the company and it insisted on a 50/50 split. However, the issue was resolved in January 1999 when BAe abandoned talks with DASA in favour of merging with Marconi Electronic Systems to become BAE Systems. Then in 2000 three of the four partner companies (DaimlerChrysler Aerospace, successor to Deutsche Airbus; Aérospatiale-Matra, successor to Sud-Aviation; and CASA) merged to form EADS, simplifying the process. EADS now owned Airbus France, Airbus Deutschland and Airbus España, and thus 80% of Airbus Industrie. BAE Systems and EADS transferred their production assets to the new company, Airbus SAS, in return for shareholdings in that company.

Development of the A380

In mid-1988 a group of Airbus engineers led by Jean Roeder began working in secret on the development of an ultra-high-capacity airliner (UHCA), both to complete its own range of products and to break the dominance that Boeing had enjoyed in this market segment since the early 1970s with its 747. The project was announced at the 1990 Farnborough Air Show, with the stated goal of 15% lower operating costs than the 747-400. Airbus organised four teams of designers, one from each of its partners (Aérospatiale, DaimlerChrysler Aerospace, British Aerospace, CASA) to propose new technologies for its future aircraft designs. In June 1994 Airbus began developing its own very large airliner, then designated as A3XX. Airbus considered several designs, including an odd side-by-side combination of two fuselages from the Airbus A340, which was Airbus’s largest jet at the time. Airbus refined its design, targeting a 15% to 20% reduction in operating costs over the existing Boeing 747–400. The A3XX design converged on a double-decker layout that provided more passenger volume than a traditional single-deck design.

Five A380s were built for testing and demonstration purposes. The first A380 was unveiled at a ceremony in Toulouse on 18 January 2005, and its maiden flight took place on 27 April 2005. After successfully landing three hours and 54 minutes later, chief test pilot Jacques Rosay said flying the A380 had been “like handling a bicycle”. On 1 December 2005, the A380 achieved its maximum design speed of Mach 0.96. On 10 January 2006, the A380 made its first transatlantic flight to Medellín in Colombia.

On 3 October 2006, CEO Christian Streiff announced that the reason for delay of the Airbus A380 was the use of incompatible software used to design the aircraft. Primarily, the Toulouse assembly plant used the latest version 5 of CATIA (made by Dassault), while the design centre at the Hamburg factory were using the older and incompatible version 4. The result was that the 530 km of cables wiring throughout the aircraft had to be completely redesigned. Although no orders had been cancelled, Airbus still had to pay millions in late-delivery penalties.

The first aircraft delivered was to Singapore Airlines on 15 October 2007 and entered service on 25 October 2007 with an inaugural flight between Singapore and Sydney. Two months later Singapore Airlines CEO Chew Choong Seng said that the A380 was performing better than both the airline and Airbus had anticipated, burning 20% less fuel per passenger than the airline’s existing 747-400 fleet.Emirates was the second airline to take delivery of the A380 on 28 July 2008 and started flights between Dubai and New York on 1 August 2008. Qantas followed on 19 September 2008, starting flights between Melbourne and Los Angeles on 20 October 2008.

Expansion and sale of BAE stake

In 2003, Airbus and the Kaskol Group created an Airbus Engineering centre in Russia, which started with 30 engineers and since has emerged as a model of success for Airbus’ globalisation strategy. It was the first engineering facility to open in Europe outside the company’s home countries. Equipped with state-of-the-art communications equipment and linked with Airbus engineering sites in France and Germany, the facility performs extensive work in disciplines such as fuselage structure, stress, system installation and design. In 2011, the centre employs some 200 engineers who have completed over 30 large-scale projects for the A320, the A330/A340 and the A380 programmes. Russian engineers also performed more than half of all design work on the A330-200F freighter, with its activity related to fuselage structure design, floor grids installation and junctions design. The centre currently is involved in the A320neo Sharklets design development and numerous design works for the A350 XWB programme.

On 6 April 2006 plans were announced that BAE Systems was to sell its 20% share in Airbus, then “conservatively valued” at €3.5 billion (US$4.17 billion). Analysts suggested the move to make partnerships with U.S. firms more feasible, in both financial and political terms. BAE originally sought to agree on a price with EADS through an informal process. Due to lengthy negotiations and disagreements over price, BAE exercised its put option which saw investment bank Rothschild appointed to give an independent valuation.

In June 2006 Airbus was embroiled in significant international controversy over its announcement of further delays in the delivery of its A380. Following the announcement the value of associated stock plunged by up to 25% in a matter of days, although it soon recovered afterwards. Allegations of insider trading on the part of Noël Forgeard, CEO of EADS, its majority corporate parent, promptly followed. The loss of associated value was of grave concern to BAE, press described a “furious row” between BAE and EADS, with BAE believing the announcement was designed to depress the value of its share. A French shareholder group filed a class action lawsuit against EADS for failing to inform investors of the financial implications of the A380 delays while airlines awaiting deliveries demanded compensation. As a result EADS chief Noël Forgeard and Airbus CEOGustav Humbert announced their resignations on 2 July 2006.

On 2 July 2006 Rothschild valued BAE’s stake at £1.9 billion (€2.75 billion), well below the expectation of BAE, analysts, and even EADS. On 5 July BAE appointed independent auditors to investigate how the value of its share of Airbus had fallen from the original estimates to the Rothschild valuation; however in September 2006 BAE agreed the sale of its stake in Airbus to EADS for £1.87 billion (€2.75 billion, $3.53 billion), pending BAE shareholder approval. On 4 October shareholders voted in favour of the sale, leaving Airbus entirely owned by EADS.

2007 restructuring

On 9 October 2006 Christian Streiff, Humbert’s successor, resigned due to differences with parent company EADS over the amount of independence he would be granted in implementing his reorganisation plan for Airbus. He was succeeded by EADS co-CEO Louis Gallois, bringing Airbus under more direct control of its parent company.

On 28 February 2007, CEO Louis Gallois announced the company’s restructuring plans. Entitled Power, the plan would see 10,000 jobs cut over four years; 4,300 in France, 3,700 in Germany, 1,600 in the UK and 400 in Spain. 5,000 of the 10,000 would be at sub contractors. Plants at Saint Nazaire, Varel and Laupheim face sell off or closure, whileMeaulte, Nordenham and Filton are “open to investors”. As of 16 September 2008 the Laupheim plant has been sold to a Thales-Diehl consortium to form Diehl Aerospace and while the design activities at Filton have been retained, the manufacturing operations have been sold to GKN of the United Kingdom. The announcements resulted in Airbus unions in France and Germany threatening strike action.

2011 A320neo record orders

At the 2011 Paris Air Show, Airbus received total orders valued at about $72.2 billion for 730 aircraft, representing a new record in the civil aviation industry. The A320neo (“new engine option”) model, announced in December 2010, received 667 orders, which, together with previous orders, resulted in a total of 1029 orders within six months of launch date, also a new record.”

*Information from Airbus.com and Wikipedia.org

**Video published on YouTube by “airbus