Airbus has 13 orders for its new A350. The competing product from Boeing (NYSE: BA), the 787, has over 600. The Boeing lead has forced Airbus to offer large discounts on its plane
The A350 has had plenty of problems which include fuel efficiency and ease of maintenance complaints. Airbus has tried to address these, but without much success.
The troubles with its new plane fall on the heels of delays in delivery of its larger super-jumbo A380 which competes with the new Boeing 747-8. The problems with both planes may make it difficult for the Airbus parent, EADS, to turn itself around. The holding company has changed its top management is the hope of addressing troubles with new product development, but so far this has not worked.
EADS is owned by arms of the French and Spanish governments and DaimlerChrysler (NYSE: DCX). The owners have fought over which country's unions should bear the majority of cost cuts as EADS and Airbus attempt to save money.
EADS may be an example of the problems that a commercial enterprise has when governments have large interests. Management has to answer to a small number of powerful shareholders who often have different agendas and this can prevent executives from addressing the business problems at hand.
And EADS and Airbus certainly have plenty of problems.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
6-14-2007 @ 3:35AM
Bryan said...
Airbus's boomerang has had a good flight, but now seems to be causing them pain in the back of their head. Will they remember that it was they who launched it? As I have said here before, socialism is a powerful narcotic.
They will achive some sort of recovery, but may find their next fight with Bombardier just to stay in second place, all the while Boeing continues to run away from the pack. I've been privileged to see the production 787 Dreamliner up close...and it's beautiful. 13 vs. 600...may I suggest for anyones consideration that the marketplace is loudly speaking.
Like Boeing during times of stupidity, they (Airbus) made their bed, and it's a real mess. Night-night!